HDFC Bank shares have been on a downward trend, with the stock experiencing a significant decline on January 18. The stock has suffered a plunge of over 15% in the last two days, with US-listed shares falling 9.1% overnight
The decline in HDFC Bank shares is driven by concerns about the bank's net interest margin (NIM) performance, which was flat QoQ at 3.6% in Q3FY24, and provisions jumped by 39% on a sequential basis. The bank's net interest income (NII) was up 4% QoQ, and net profit rose moderately by 2.5%
The weakness in HDFC Bank shares has created a ripple effect on other banking stocks, particularly private sector lenders, driving the Bank Nifty index down 4% in a record single-day fall since March 2022.
Despite the concerns, some analysts expect a recovery in the stock going ahead, with a one-year target of Rs 1,700 on the stock. However, the lower LCR and slower deposit growth may limit NIM's expansion going forward.
The decline in HDFC Bank shares has led to a significant loss in market capitalization, with a total of Rs 1.35 lakh crore investor wealth wiped off in the 12% selloff on the counter in the last two days
The future of HDFC Bank shares remains uncertain, with the stock continuing to slide after the 12% fall in the last two days. Investors should closely monitor the bank's performance and consider their investment strategies accordingly.