HDFC Bank Stock Continues to Decline, Dropping Over 3% on January 18

18 Jan 2024 , 11:04 AM

HDFC Bank’s stock continued to fall on January 18, plunging more than 3% after its US-listed shares dropped 9.1% over night to $55.5, its lowest level in a single day since March 2020. Over the past two days, there has been a significant decline of over 15% in the HDFC Bank ADR, and over 10% in the HDFC Bank stock.

Following investors’ disappointment with the private sector lender’s October-December quarter (Q3FY24) performance, HDFC Bank shares fell more than 8% on January 17 to settle at Rs 1,536. On Wednesday, the stock experienced its largest one-day drop in more than three years, and it also started to lag far behind the benchmark Nifty 50 index, where it has a weightage of 14%.

The Bank Nifty index dropped 4% in the biggest single-day decline since March 2022 as a result of the weakness in HDFC Bank shares, which had a knock-on effect on other banking companies, especially private sector lenders.

The biggest private lender in the nation started having problems when it revealed a significant miss in net interest margins (NIM) in Q3FY24 as a result of increased funding costs. The fall in Q3 was also attributed to higher provisions and decadal low earnings per share (EPS) growth.

In Q3FY24, the private sector lender’s NIMs were steady on a quarterly basis at 3.6%, while provisions increased by 39% sequentially. Aside from that, in Q3FY24, the bank’s net profit increased somewhat by 2.5% QoQ and its net interest income (NII) increased by 4% QoQ.

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