Bearish Sentiment? HDFC Bank Shares Down for 3 Consecutive Days; Here’s Why

Synopsis: The shares of HDFC Bank extended their losing streak for a third consecutive session on Wednesday, January 7, remaining among the top three losers on the Nifty Bank index. In this article, let’s see the reason for the fall.

The shares of Large-Cap Company, in providing a comprehensive suite of financial products and services through four primary business segments, Retail Banking, Wholesale/ Corporate Banking, Commercial and Rural Banking, and Treasury Operations, are in the spotlight as they have extended losses for a third straight session. In this article let’s explore the reason for the fall.

With a market capitalization of Rs. 14,60,227.15 Crores on Wednesday, the shares of HDFC Bank Ltd declined upto 1.7 percent, reaching a low of Rs. 946.00 compared to its previous closing price of Rs. 962.40.

What Happened

HDFC Bank Ltd, engaged in providing a comprehensive range of services covering retail banking, wholesale banking, commercial and rural banking, and treasury operations, has been in focus as it has extended its losing streak for a third consecutive session on Wednesday, remaining among the top three losers on the Nifty Bank index. 

Reason for the Fall

Slower Deposit Growth

In an exchange filing on January 5, HDFC Bank reported that its gross advances increased 11.9% year-on-year (YoY) to around Rs. 28,445 billion as of December 31, 2025, up from Rs. 25,426 billion a year earlier.

For Q3FY26, average deposits grew 12.2% YoY to Rs. 27,524 billion, compared with Rs. 24,528 billion in the same period last year. Average CASA deposits also rose 9.9% YoY to Rs. 8,984 billion from Rs. 8,176 billion in the corresponding quarter. The recent decline in the stock may be attributed to slower deposit growth and profit-booking following recent gains ahead of the Q3 results.

Significant block deal

HDFC Bank remained among the top three losers on the Nifty Bank index following a significant block deal during the session. Approximately 1.84 crore shares, representing around 0.10% of the bank’s equity, were traded in the deal, with a total value of about Rs. 1,756 crore. The shares exchanged hands at an average price of Rs. 950 each, while the identities of the buyers and sellers are yet to be disclosed.

Trading in the stock continued to remain robust, with overall turnover exceeding Rs. 3,750 crore during the session. Notably, more than 85 percent of the traded volume has been earmarked for delivery, reflecting strong investor participation in the market.

Concerns over its LDR

The bank’s LDR rose by 50 basis points quarter-on-quarter to nearly 99 percent, even as loan growth returned to double digits for the first time since the 2023 merger. This elevated LDR has raised questions about HDFC Bank’s ability to accelerate loan growth without a substantial increase in deposits.

Investors remain cautious as peers currently enjoy more comfortable deposit positions. While management aims to reduce the LDR below 90 percent in the near term, the market expects balance sheet normalisation post-merger to take time.

Financials

The company’s revenue rose by 4.81 percent from Rs. 83,002 crores to Rs. 86,994 crores in Q2FY25-26. Meanwhile, Net profit rose from Rs. 18,627 crores to Rs. 20,364 crores in the same period.

The company over the past decade, it has demonstrated strong financial performance, with a median sales growth of 16.4 percent. Over the last five years, it has achieved impressive profit growth at a CAGR of 21.0 percent, while consistently rewarding shareholders with a healthy dividend payout of 23.3 percent.

HDFC Bank Ltd. is India’s largest private sector bank, headquartered in Mumbai, offering a full spectrum of financial services from retail & corporate banking to wealth management, insurance, and investment products, known for its customer focus, digital innovation, and operational excellence, significantly expanding its offerings.

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