HDFC Bank stock continues slide, drops over 3% as investors continue to offload shares post weak results

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.

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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.