The downward trend for HDFC Bank persists as its stock witnessed a further decline of over 3 percent on January 18. This follows a substantial 9.1 percent drop in its US-listed shares to $55.5, marking the most significant single-day decrease since March 2020. Over the past two days, HDFC Bank’s American Depositary Receipt (ADR) suffered a cumulative plunge of more than 15 percent, while the domestic stock also tumbled over 10 percent.
On January 17, HDFC Bank shares experienced an 8 percent decline, closing at Rs 1,536, subsequent to disappointing results for the October-December quarter (Q3FY24). This downturn marked the largest single-day drop in over three years, positioning HDFC Bank as the major contributor to the Nifty 50 index’s decline, given its substantial weightage of over 14 percent.
The ripple effect of HDFC Bank’s weakness extended to other banking stocks, particularly in the private sector, causing the Bank Nifty index to plummet by 4 percent in its most significant single-day fall since March 2022.
The challenges for the country’s largest private lender stemmed from a notable miss in net interest margins (NIM) in Q3FY24 due to increased cost of funds. Additionally, higher provisions and a decadal low in earnings per share (EPS) growth during Q3 contributed to the overall decline. As of 10:14 am, HDFC Bank shares were trading 2.06% lower at ₹1,506.30.