HDFC Bank shares plunge 8.5%; stock sees worst day since Covid crash, investors lose Rs 1 lakh-crore | India Business News

HDFC Bank share price today: India’s second most-valued stock, HDFC Bank, experienced a significant decline in its market performance, which even resulted in today’s BSE Sensex and Nifty50 crash. HDFC Bank stock recorded its worst daily performance since the Covid crash three years ago, with an 8.5% fall in its stock price.
As a result, investors in the bluechip lost over Rs 1 lakh crore, causing the market capitalization of the Nifty heavyweight to drop to Rs 11.67 lakh crore, stated an ET report.This decline surpasses HDFC Bank’s previous worst fall, which occurred during the Covid-lows on March 23, 2020, with a loss of 12.7%.
HDFC Bank’s Q3 profit increased by 33% YoY to Rs 16,373 crore. However, this increase was mainly driven by a one-off write-back of Rs 1,500 crore of tax provisions.Santanu Chakrabarti of BNP Paribas commented on the bank’s performance, stating that while the NIM (calculated) at 3.7% was on the mark, it remained flat sequentially on a low base, a contextual disappointment given faster than expected reduction in balance sheet cash and investments. “Yields on interest-earning assets stayed flat QoQ despite (i) the drawdown in balance-sheet liquidity and (ii) a reduction of lower-yield wholesale loans in the loan mix. This was the crux of the disappointment,” Chakrabarti said.

HDFC Bank shares: What should investors do?

Despite the recent decline in HDFC Bank’s share price, brokerages, both domestic and foreign, still consider it a top buy for long-term portfolios. Jefferies, for example, has reduced the target price to Rs 2,000 from Rs 2,100 but maintained a buy rating.
During an analyst call, the company management acknowledged the competitive pressures on deposit growth due to tight liquidity. However, they believe that over the medium term, a greater contribution of retail assets in the overall asset mix will help normalize margins to higher levels.

JM Financial stated, “While acknowledging the near-term pressures, we believe HDFC Bank remains well-placed to deliver healthy growth with relatively lower risk. We maintain buy with a target price of Rs 2,010 valuing core HDFC Bank at 2.4x FY26E P/BV and subsidiaries valued at Rs 210.”
Leading brokerages like CLSA and Axis Securities have also increased their target prices on HDFC Bank, expressing optimism about its potential.
Rs 10,000 crore fund manager, Saurabh Mukherjea, described the bank’s valuations as being at mouth-watering levels.
Mukherjea emphasized the strength of HDFC Bank’s Q3 results and expressed confidence in institutional appetite returning as the selling abates and the company stabilizes. He highlighted the bank’s profitability, stating that without merger synergies kicked in, HDFC Bank is doing around 1.9% ROA. If that trickles up to 2% ROA, assume gearing of nine times. This is an 18% ROE bank. “We are looking at an 18% ROE bank, even without meaningful merger synergies kicking in. And an 18% ROE bank growing consistently at 20% at this scale, we do not have too many other lenders operating on this scale, at this level of profitability anywhere in the world,” he was quoted as saying.
Over the past two years, HDFC Bank has only seen a 1% increase in its stock price, compared to the Sensex’s 17% surge.