HDFC Bank shares remain under pressure; down 11% in 2 days as Q3 results disappoint

While the management guided for NIM to bottom out gradually over the next few quarters but brokerages were unconvinced with the pace of improvement

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

HDFC Bank shares continued to remain under pressure, slipping over 2 percent in afternoon deals Rs 1,499 per share on January 18 after its US-listed shares fell 9.1 percent overnight to $55.5, marking its biggest single-day drop since March 2020. In the last two days, the HDFC Bank ADR has suffered a plunge of over 15 percent, while HDFC Bank stock has tanked over 11 percent.

The weakness in HDFC Bank shares created a ripple effect on other banking stocks, particularly private sector lenders, driving the Bank Nifty index down 0.6 percent on January 18 noon trade.

The woes for the country's largest private lender began after it reported a key miss in net interest margins (NIM) in Q3FY24 due to higher cost of funds. Higher provisions and decadal low earnings per share (EPS) growth in Q3 also contributed to the decline.

Also read: MC Analysis: Top 5 takeaways from HDFC Bank’s Q3 earnings

While the management guided for NIM to bottom out gradually over the next few quarters, brokerages stayed unconvinced with the pace of improvement. Most of the analysts reduced their target price on the counter but retained a bullish call due to attractive valuations.

"The lower liquidity coverage ratio (LCR), credit-to-deposit (CDR) bottleneck and slower deposit growth may squeeze NIMs going forward. We believe that the Street is concerned about the above factors. Nevertheless, we may witness recovery in the coming period. We have a 12-month price target of 1,700 for HDFC Bank," said Ajit Kabi, research analyst at LKP Securities.

The private sector lender's NIMs were flat QoQ at 3.6 percent in Q3FY24, whereas provisions jumped by 39 percent on a sequential basis. Apart from that, the bank's net interest income (NII) was up 4 percent QoQ and net profit rose moderately by 2.5 percent QoQ in Q3FY24.

In previous trading session, HDFC Bank stock saw the biggest single-day decline in over three years and also became the major drag behind the benchmark Nifty 50 index, where it commands the largest weightage of over 14 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.