HDFC highly optimistic about the long term prospects of the housing sector in India

Published at : Sep 16, 2026 02:56 PM (IST)

Total Views : 10

HDFC highly optimistic about the long term prospects of the housing sector in India

The below message is given by Keki M. Mistry Interim Part-time Chairman and Non-Executive (Non-Independent) Director in the annual report of HDFC Limited for FY 25-26.

The Print Times

This Financial Year was unusual. Unusual - whether it was tariffs or geopolitics with consequent fallout on the global economy. While the tariffs at the beginning of the year resulted in substantial changes in global trade engagement, the situation in West Asia resulted in the global economy receiving another shock. The difficult situation in West Asia continues. 

In the year 2025, global growth was supported by the frontloading of exports, easing trade tensions and increased investments in AI and technology. Furthermore, expansionary fiscal and monetary policies supported economic activity during the year. Going by the IMF estimates, global GDP grew by 3.4 per cent in 2025 compared to 3.3 per cent in 2024. Inflation, on the other hand, averaged at 4.1 per cent in 2025 lower than 5.8 per cent in 2024. The comfortable inflation position enabled major central banks to continue monetary easing during the year.

Looking ahead, the IMF estimates global GDP growth at 3.0 per cent in 2026, lower than 3.4 per cent in 2025. The disruption caused by the US-Iran conflict is expected to weigh on global growth in 2026. The economic impact of the conflict, however, could ease going forward if the US and Iran work towards a durable peace deal. 

The Indian economy, although exposed to these challenges, held firm with GDP growth estimated at 7.7 per cent in the Financial Year 2025-26, compared to 7.1 per cent in the previous year. This has been supported by strong domestic demand conditions, easing inflationary pressures, accommodative monetary policy and sustained public investment. GST rate cuts during the third quarter of the year added further impetus to consumer demand.

Inflationary pressures moderated significantly during FY2025-26, with headline retail inflation averaging 2.1 per cent during the year. Lower food inflation, easing supply-side pressures, and indirect tax reductions contributed to the moderation in prices. On the policy front, the RBI continued to support growth, through, not only monetary easing but also durable liquidity injection.

This year, both the RBI and the Government have pro-actively managed the fallout from the West Asia conflict. More recently, the central bank and the Government delivered a coordinated response and announced several measures to shore up capital flows. These measures were a mix of short-term remedies and more substantial structural reforms, including the removal of long-term and short-term capital gains tax on investments by foreign entities in government debt instruments. These measures are likely to boost confidence of foreign investors and therefore improve foreign investments.

Looking ahead, FY2026-27 GDP growth is estimated at 6.6 per cent by the RBI while inflation is expected to inch up towards 5.1 per cent on account of the energy shock. A de-escalation in the West Asia conflict will bode favourably for India’s macro-outlook for FY2026-27. The continued momentum in economic activity, increase in credit demand, reduction in energy costs and a stable rupee are measures that are likely to support growth.

MERGER SYNERGIES

Three years ago we concluded the merger of HDFC Limited with and into HDFC Bank. As you’re aware this transformed the HDFC Bank Group into one of the leading financial services conglomerates in India. At the heart of this merger has been, marrying the expertise of the home loan product with the Bank’s reach and technology. I am happy to say that many of the merger related synergies are progressing well. Cross sell is at a healthy level and we continue to work towards realising its potential on an ongoing basis over the long term.

I remain highly optimistic about the long term prospects of the housing sector in India which will have a positive cascading effect on lending institutions.

I am a firm believer that the housing sector has a multiplier effect on the economy and is a major employment generator with linkages to nearly 300 industries, both in terms of direct and indirect jobs created. The Government in the last few years has kept this sector in sharp focus in its policy formulations and has supported it through a conducive framework.

Following the merger, HDFC Bank today has one of the largest home loan portfolios in the country. Going forward, supported by rapid urbanisation trends, inherent demand for housing and a favourable institutional framework, the Bank is well positioned to maximise on market opportunities.
 

Published at : Sep 16, 2026 02:56 PM (IST)

Total Views : 10