HDFC Bank Shares Fall Sharply as Foreign Investors Exit Despite Strong Q4 Results

Shares of HDFC Bank Ltd came under pressure on Thursday, with the stock trading at ₹786.35, down ₹13.55 or 1.69% in early trade. The decline comes amid continued foreign institutional investor (FII) selling and broader weakness in banking stocks, even as the lender reported a steady financial performance for the March 2026 quarter.

During the March quarter, HDFC Bank, along with ICICI Bank Ltd, witnessed significant FII outflows, with combined selling nearing ₹45,000 crore. FIIs alone offloaded nearly ₹35,000 crore worth of HDFC Bank shares, reducing their stake from 47.66% to 44%. This aggressive selling has weighed on investor sentiment and contributed to a sharp correction in the stock, which has plunged around 26% over recent months.

Investor confidence was further impacted by the sudden resignation of part-time chairman Atanu Chakraborty, reportedly over ethical concerns. Additionally, ongoing geopolitical tensions, including the US–Iran–Israel conflict and global trade uncertainties, have kept banking stocks under pressure.

Despite these headwinds, HDFC Bank posted a solid operational performance. The bank reported a net profit of ₹19,221 crore for the fourth quarter, marking a growth of around 9% compared to ₹17,616.14 crore in the same period last year. Net Interest Income (NII) rose 3.8% year-on-year to ₹33,281.5 crore, while net interest margin (NIM) stood at 3.4%. Pre-provision operating profit increased 4.37% to ₹27,802.92 crore, reflecting stable core earnings.

The bank also saw a decline in provisions, which fell to ₹2,609.57 crore during the quarter from ₹2,837.86 crore sequentially and ₹3,193.05 crore a year ago, indicating improving asset quality. The board recommended a final dividend of ₹13 per equity share of ₹1 for the financial year ended March 31, 2026.

In terms of stock performance, HDFC Bank shares have risen about 2% over the past one month. However, the stock has declined over 14% in the last three months and more than 20% in six months. On a yearly basis, it is down around 16%, while it has eased about 4% over the past three years. Over a longer horizon, the stock has delivered a modest gain of 14.5% in the last five years.

Overall, while near-term sentiment remains subdued due to FII outflows and global uncertainties, HDFC Bank’s strong fundamentals and stable earnings profile continue to reflect underlying resilience.