HDFC Bank shares tank further: Rs 1.35 lakh crore m-cap gone in 2 days!

Shares of HDCF Bank Ltd tanked 4 per cent in Thursday's trade, in addition to 8.44 per cent fall in the previous session, as investors shunned the banking counter on higher funding cost pressure and weak net interest margin (NIM) as seen in the December quarter results. HDFC Bank shares slipped 3.68 per cent to hit a sub-Rs 1,500 level of Rs 1,480.25. The selling was seen amid high turnover.

Within the first hour of trading, 2,87,70,267 HDFC Bank shares worth Rs 4,311 crore changed hands on NSE. A total of Rs 1.35 lakh crore investor wealth wiped off in the 12 per cent selloff on the counter in two sessions. The third-most valued stock on stock exchanges commanded a market value of Rs 11,39,518 crore against Rs 12,74,740.22 crore two sessions ago.

"HDFC Bank saw deposit growth lag loan growth, which is concerning as the C-D ratio has now reached a sector high-level of 110 per cent, making deposits a significant constraint for growth going ahead, in our view. It has also scaled down its branch expansion plans, which are key for retail deposit mobilisation. We have hence cut our deposit growth outlook to 17 per cent CAGR over FY24-26F," Nomura India said.

The foreign brokerage cut its loan growth forecast to 15 per cent against 17 per cent earlier. "We have cut our NIM estimates by 15 bps across FY25-26F, as the benefit of funding mix improvement (which we were building in earlier) appears to be a significant challenge and a much more of a longer-term story," Nomura India said.

Prabhudas Lilladher said a softer loan accretion is likely to affect margins. For FY25 and FY26 it cut NII by 2 per cent and 3 per cent and lower NIM by 4 basis points and 5 basis points. That said, owing to lower replacement cost PL still expects NIM improve over FY24-26E from 3.55 per cent to 3.67 per cent.

"Given the regulator’s focus on CD ratio and HDFC Bank already at 110 per cent, with LCR of 110 per cent, the bank has much to balance (growth versus NIM conundrum). While one may argue on bottoming of earnings, we believe recovery may take longer and the stock may see time correction till investors find merit in execution," Elara Securities said.

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