HDFC Bank Ltd, the largest stock on benchmark indices, has been under sharp pressure in recent sessions despite posting a healthy set of results for the third quarter (October to December) of financial year 2025-26 (Q3FY26).
The bank’s shares were trading at ₹928, up 1.3%, but remain down 7.59% over the past six months, reflecting persistent weakness in investor sentiment. The pressure intensified after HDFC Bank’s American Depositary Receipts (ADRs) witnessed a sharp sell-off overnight, plunging 6.33%, according to an Economic Times report. ADRs, which represent shares of a foreign company listed and traded on US stock exchanges, often reflect global investor sentiment toward the stock.
The decline marked the second consecutive session of losses for HDFC Bank’s ADRs, which ended at US$34.17 on January 5. The fall came after the bank announced its Q3FY26 business update, which appears to have disappointed overseas investors and triggered selling pressure.
Strong Q3FY26 Numbers, But Growth Outlook Remains Under Watch
Despite the sell-off, HDFC Bank delivered a strong set of quarterly numbers. The private sector lender posted a Q3FY26 net profit of ₹18,600 crore, up 11% year-on-year, driven by higher treasury income. Its net interest income (NII) rose 6.4% Y-o-Y to ₹32,620 crore, while net interest margins (NIMs) expanded 8 basis points quarter-on-quarter to 3.35%. The bank also recorded 12% Y-o-Y loan growth and 11.6% deposit growth, pushing its loan-to-deposit ratio (LDR) up to 98.7%.
Analysts, however, remain cautious on the growth outlook for the lender. InCred Equities believes HDFC Bank can deliver relatively better margins compared with peer large private banks over the next few years. The brokerage expects margins of 3.4% in FY27F and 3.5% in FY28F, respectively. “In the near term, key monitorables will be delivery on deposit growth as well as margin progression,” the analysts said.