HDFC Bank ends lower for second consecutive session as Q1 earnings fail to cheer D-Street
The scrip has fallen 7.09% in two sessions, from its recent closing high of Rs 819.60 recorded on Friday (17 July 2026).
On Saturday, the country's most valued private-sector lender had announced its earnings for the three-month period ended on 30 June 2026.
HDFC Bank had reported a 4.98% increase in standalone net profit to Rs 19,059.72 crore in Q1 FY27 as against Rs 18,155.21 crore posted in Q1 FY26.
Total income declined 7.08% year on year (YoY) to Rs 92,184.38 crore in Q1 FY27 from Rs 99,200.03 crore in Q1 FY26.
The bank?s average deposits grew 13.3% YoY to Rs 30,11,500 crore while gross advances rose by 15.4% YoY to Rs 30,60,800 crore as on 30 June 2026.
Net interest income (interest earned less interest expended) grew 6.7% YoY to Rs 33,530 crore in Q1 FY27 from Rs 31,440 crore in Q1 FY26.
However, its net interest margin (NIM) stood at 3.26%, remaining below the pre-merger level of around 4% seen before HDFC Bank's merger with HDFC Ltd in 2023.
As per media reports, the weakness in the bank?s earnings could be attributed to a higher contribution from lower-yielding corporate loans, relatively slower expansion in the retail portfolio, and continued moderation in the CASA ratio. Softer fee income and slower retail loan growth also weighed on the overall operating performance.
Despite the muted quarterly performance, most research houses reportedly retained their positive stance on the stock, arguing that the current weakness is cyclical rather than structural.
One research firm has reportedly reiterated its 'Buy' rating with a target price of Rs 963. While the domestic research house has acknowledged that HDFC Bank continues to lag peers such as ICICI Bank on loan growth, margins, and the CASA ratio, it believes the lender remains well placed to benefit from favourable sector trends and attractive valuations.
Apart from earnings, another issue that kept investors on the fence was the lack of clarity over the CEO succession plan.
As per media reports, the bank is awaiting the outcome of an additional review by its independent directors before recommending CEO Sashidhar Jagdishan's reappointment to the Reserve Bank of India (RBI).
The bank has been under investor scrutiny since former chairman Atanu Chakraborty resigned in March 2026, citing concerns that certain practices were not aligned with his personal ethics.
However, an external legal review completed last month found no evidence to substantiate the governance concerns Chakraborty had raised.
HDFC Bank is India's largest private sector lender. As of 30 June 2026, the bank's distribution network comprised 9,694 branches and 20,958 ATMs across 4,175 cities and towns.
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