HDFC Bank stock plunges over 5% owing to investors concern on performance

Shares of India’s largest private sector lender HDFC Bank on Monday (20.07.2026) declined by 5.12% to ₹777.60 apiece on the NSE owing to investor concern regarding the bank’s first quarter (Q1 FY27) performance.  

The fall resulted in shareholders’ wealth erosion of ₹74,250 crore in one day. As per NSE data, the full market cap of the bank is down to ₹11,88,000 crore from ₹12,62,250 crore on Friday. 

The bank had on Saturday reported 5% growth in net profit to ₹19,060 crore which had been viewed as below-market expectation. 

While HDFC Bank saw 5% growth in Q1 net profit, it’s competitors ICICI Bank and Axis Bank, which also announced results on Saturday, reported 16% and 23% growth respectively in net profit to ₹14,805 crore and ₹7,114 crore.

This comparison brought HDFC Bank’s underperformance to the fore, said analysts. 

Although HDFC Bank reported profit growth and healthy expansion in loans and deposits, investors reacted negatively because the bank’s net interest margin (NIM), a key performance matrix. fell to 3.26% or significantly below the levels seen before the bank’s merger with HDFC Ltd. 

This was owing to rising cost of funds, intense competition for deposits, and pressure on lending yields analysts said adding this would keep pressure in the bank’s performance in the coming quarters. 

Several brokerages have downgraded their ratings of HDFC Bank following the results, adding to the negative sentiment in the market. 

The bank had been under the radar since it’s past part time chairman Atanu Chakraborty stepped down abruptly citing ethical reasons. The bank has named former finance secretary Rajiv Kumar as it’s new part-time chairman. The RBI approved the appointment. It has also named Puneet Sharma as the new CFO who will replace existing CFO Srinivasan Vaidyanathan who will retire in November. 

Broader market conditions further amplified the decline, analysts said. The markets were already under pressure due to rising crude oil prices and geopolitical tensions in West Asia, leading to investors’ concern.