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HDFC Bank shares extended their losing streak for the third consecutive session, with the stock declining more than 8 per cent over three trading days and eroding nearly INR 1 lakh crore from the bank's market capitalisation. The sharp fall came despite the lender reporting a rise in June quarter net profit, as investors remained concerned about pressure on net interest margins (NIMs) and weaker operating performance. The decline also pushed HDFC Bank to the third position in India's market capitalisation rankings, behind Reliance Industries and Bharti Airtel.
HDFC Bank shares continued to remain under pressure for the third straight trading session, declining more than 8 per cent over the three-day period as investors reacted to concerns over the bank's net interest margins (NIMs). The sustained fall wiped out around INR 1 lakh crore from the lender's market valuation and pushed it to the third position among India's most valuable listed companies.
On the BSE, the stock settled at INR 753.15, down 1.09 per cent. During the trading session, it had fallen as much as 1.47 per cent to INR 750.25. On the NSE, the stock also closed 1 per cent lower at INR 753.15.
Over the three trading sessions, HDFC Bank's shares declined 8.11 per cent, reducing its market capitalisation to INR 11,59,950.98 crore. Following the decline, Bharti Airtel moved ahead to become India's second most-valued listed company with a market capitalisation of INR 12,16,839.14 crore, while Reliance Industries retained the top position with a market value of INR 17,44,141.25 crore.
Market participants attributed the weakness in the stock primarily to concerns over the bank's margin outlook. Analysts said the quarterly performance fell short of market expectations, particularly on the net interest margin front, despite the bank reporting growth in net profit.
Earlier this week, HDFC Bank reported a standalone net profit of INR 19,060 crore for the June quarter, registering a 5 per cent increase from INR 18,155 crore reported during the corresponding period last year.
However, the bank's total income declined to INR 92,184 crore during the quarter from INR 99,200 crore recorded a year earlier, according to its regulatory filing. Interest income, however, improved to INR 79,363 crore from INR 77,470 crore in the corresponding quarter of the previous financial year.
The bank also reported a decline in operating profit, which stood at INR 28,169 crore compared with INR 35,734 crore in the same quarter last year.
Net interest income (NII), a key indicator of a bank's core lending business, increased 7 per cent year-on-year to INR 33,530 crore from INR 31,440 crore. At the same time, the bank reported a net interest margin of 3.26 per cent on total assets and 3 per cent based on interest-earning assets, which remained a key area of concern for investors.
The latest correction in HDFC Bank's stock comes even as the banking sector continues to face pressure on margins due to changes in the interest rate environment and intense competition for deposits. Investors are closely tracking how large private lenders manage profitability while maintaining credit growth in the coming quarters.
Source PTI
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