Why is equals() not called while adding to HashSet and hashCode matches?

The hash set checks reference equality first, and if that passes, it skips the .equals call. This is an optimization and works because the contract of equals specifies that if a == b then a.equals(b).

I attached the source code below, with this check highlighted.

If you instead add two equal elements that are not the same reference, you get the effect you were expecting:

    HashSet st1=new HashSet();
    st1.add(new Student(89));
    st1.add(new Student(89));
    System.out.println("Ho size="+st1.size());

results in

$ java Test1
Hello-hashcode
Hello-hashcode
Hello-equals
Ho size=1

Here’s the source code from OpenJDK 7, with equality optimization indicated (from HashMap, the underlying implementation of HashSet):

public V put(K key, V value) {
    if (key == null)
        return putForNullKey(value);
    int hash = hash(key.hashCode());
    int i = indexFor(hash, table.length);
    for (Entry<K,V> e = table[i]; e != null; e = e.next) {
        Object k;
//                                         v-- HERE
        if (e.hash == hash && ((k = e.key) == key || key.equals(k))) {
            V oldValue = e.value;
            e.value = value;
            e.recordAccess(this);
            return oldValue;
        }
    }

    modCount++;
    addEntry(hash, key, value, i);
    return null;
}