HDFC Bank Shares Fall to Three-Month Low After Q3 Update: Here’s Why

Shares of private lender HDFC Bank fell as much as 2% on Tuesday, hitting a three-month low. The decline extended the stock’s slide that began on January 2. The weakness over the past two sessions has been attributed to the bank’s Q3 business update, with some analysts flagging slower deposit growth.

For the third quarter of FY26, HDFC Bank’s total advances rose 11.9% year on year and 2.7% quarter on quarter to ₹28.4 trillion. Assets under management (AUM) at the end of the quarter grew 9.8% year on year and 2.7% sequentially, while average AUM increased 9% year on year and 2.5% quarter on quarter.

Deposits stood at ₹28.6 trillion, up 11.5% from a year ago and 2.1% from the previous quarter. Low-cost CASA deposits rose 1.2% quarter on quarter and 10.1% year on year. Term deposits grew faster, rising 2.5% sequentially and 12.3% from a year earlier.

On an average basis, deposits grew 11.5% year on year and 1.5% quarter on quarter. Average CASA deposits increased 9.9% year on year and 2.4% sequentially, while average term deposits rose 13.4% from a year ago and 1.1% from the previous quarter.

According to analysts at Motilal Oswal Financial Services, the bank’s advances growth was broadly in line with expectations, while deposit growth marginally lagged.

“HDFC Bank’s advances growth was broadly in line, while deposit growth marginally lagged our estimate. Consequently, on a calculated basis of gross advances, the CD ratio increased to 99.5% (vs 98.8% in 1QFY26),” the note said.

Meanwhile, analysts at Nomura reportedly said slower deposit growth limited the increase in lending during the quarter, as the credit-deposit (CD) ratio, which measures loans as a percentage of deposits, climbed to nearly 100%. The Japanese brokerage noted that HDFC Bank needs strong deposit inflows to accelerate loan growth going forward.

On the BSE, HDFC Bank shares were down 1.66% at ₹961 apiece at 2.41 pm. The stock was last at similar levels in October last year. Over the past five sessions, it has declined 3.05%, while returns over the past year remain negative at 4.4%.