Why HDFC Bank shares are down nearly 7% today
HDFC Bank's stock fell 6.86% today to Rs. 1,563.90 in the aftermath of its Q3FY24 results which left investors disappointed. The market dissatisfaction regarding Q3 results was further worsened as the bank's US-listed ADRs (American Depositary Receipt) plummeted almost 7% overnight. ADRs are a negotiable certificate issued by US depositary banks representing shares of a foreign company's stock. HDFC Bank's net profit increased 33% YoY to Rs. 16,372 crore, which was near expectations but included a one-time tax rate gain.
Net interest incom below estimates in Q3
The bank's net interest income (NII) rose by 24% YoY to Rs. 28,470 crore during the third quarter, missing analysts' predictions. Before the Q3 results were announced on January 16, HDFC Bank's shares closed slightly higher at Rs. 1,678, while the benchmark Sensex dipped 0.2%. The bank's ADR took a nosedive of 6.7% on the NYSE to $61, marking the largest single-day drop since April 2022.
HDFC Bank's fluctuations can affect Nifty's overall performance
As the HDFC Bank holds over 14% weightage on the Nifty50 index, any weakness could impact the overall benchmark's performance. The non-performing assets (NPAs) of India's largest private sector bank increased to 1.26% in Q3FY24 from 1.23% in the previous fiscal year. Over the past year, the bank's stock has gained more than 5%, compared to a 25% surge in the benchmark Sensex.
