HDFC Bank shares stock fall despite profit growth as street stays unimpressed

HDFC Bank shares traded 0.62 per cent lower at ₹707.60 on the NSE Wednesday afternoon, extending losses from Monday’s 3 per cent slide, as investors continued to book profits following the bank’s Q2 FY27 results released on Saturday. The stock has shed nearly 30 per cent over the past year and is down over 28 per cent year-to-date, trading well below its 52-week high of ₹1,020.50.

The bank reported a standalone profit after tax (PAT) of ₹195.1 billion for the quarter ended September 30, 2026, a 4.7 per cent year-on-year increase. Excluding treasury trading gains, PAT growth was stronger at approximately 12.6 per cent. Net interest income rose 9.7 per cent to ₹346.2 billion, while net revenue stood at ₹484.5 billion, up from ₹459.0 billion in the same quarter last year.

Net interest margin came in at 3.16 per cent on total assets. The cost-to-income ratio was 39.1 per cent and provisions stood at ₹35.7 billion, with a total credit cost ratio of 0.44 per cent. Asset quality improved marginally, with gross non-performing assets at 1.11 per cent of gross advances, down from 1.17 per cent in the previous quarter.

On the balance sheet, total deposits grew 18.8 per cent year-on-year to ₹33,274 billion, while gross advances rose 16.3 per cent to ₹32,195 billion. The bank’s total balance sheet size expanded to ₹45,778 billion. Capital adequacy remained well above regulatory requirements at 18.9 per cent under Basel III norms.

The muted market reaction reflects broader investor caution around private sector banking stocks, with Bank Nifty trading in a range-bound structure between 55,200 and 56,000. At current levels, HDFC Bank trades at a trailing P/E of 13.71 — a significant discount to its historical valuations — leaving analysts divided on whether the worst of the re-rating is behind the stock.