HDFC Bank shares tank over 5%; market valuation drops by Rs 64,685 crore

Shares of HDFC Bank tumbled over 5 per cent on Monday, dragging the benchmark indices lower, after the lender’s quarterly earnings disappointed on the margin front. The blue-chip stock declined 5.12 per cent to settle at Rs 777.65 on the BSE. During the day, it tumbled 5.44 per cent to Rs 775.

On the NSE, the stock tanked 5.12 per cent to end at Rs 777.60. The company’s market valuation eroded by Rs 64,685.58 crore to Rs 11,97,684.23 crore.

Heavy selling in HDFC Bank dragged down the equity markets. The 30-share BSE Sensex edged lower by 442.93 points, or 0.57 per cent, to settle at 77,708.52. The 50-share NSE Nifty declined 95.80 points, or 0.39 per cent, to end at 24,238.50.

The country’s biggest private sector lender had earned a net profit of Rs 18,155 crore in the year-ago period.

“Investor sentiment remained subdued after quarterly earnings from major private banks disappointed on the margin front, triggering a sharp sell-off in banking heavyweights,” Ajit Mishra —SVP, Research, Religare Broking Ltd, said.

HDFC Bank on Saturday reported a 5 per cent increase in standalone net profit to Rs 19,060 crore for the June quarter.

However, the total income of the bank during the quarter under review dropped to Rs 92,184 crore from Rs 99,200 crore in the same period a year ago, HDFC Bank said in a regulatory filing.

The lender’s interest income increased to Rs 79,363 crore from Rs 77,470 crore in the same quarter a year ago.

During the period, operating profit of the bank declined to Rs 28,169 crore, as compared to Rs 35,734 crore in the same quarter a year ago.

Net interest income grew 7 per cent to Rs 33,530 crore for the June quarter from Rs 31,440 crore a year ago, it said.

Net interest margin was at 3.26 per cent on total assets, and 3 per cent based on interest-earning assets.

“HDFC Bank has disappointed, particularly on the NIM front,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said, “Losses (in benchmark equity indices) were compounded by a sharp decline in HDFC Bank after weaker-than-expected net interest margins disappointed investors, putting additional pressure on the banking sector and the broader benchmarks.”