HDFC Bank shares tumble over 8% in three days on net interest margin concerns

Shares of HDFC Bank declined for the third day in a row on Wednesday, falling over 8 per cent and wiping out Rs 1 lakh crore from its market valuation, amid concerns on the margin front.

The stock ended at Rs 753.15, down 1.09 per cent on the BSE. During the day, it lost 1.47 per cent to Rs 750.25.

At the NSE, it declined 1 per cent to end at Rs 753.15.

In three days, the stock tanked 8.11 per cent, wiping out Rs 1 lakh crore from its market valuation, which stood at Rs 11,59,950.98 crore.

With this, the company slipped to the third place in market capitalisation ranking. Bharti Airtel became the second most-valued firm with a market valuation of Rs 12,16,839.14 crore. Reliance Industries is the country’s most valued firm with a market cap of Rs 17,44,141.25 crore.

According to market experts, HDFC Bank has disappointed, particularly on the NIM (Net Interest Margins) front.

HDFC Bank on Saturday reported a 5 per cent increase in standalone net profit to Rs 19,060 crore for the June quarter.

The country’s biggest private-sector lender had earned a net profit of Rs 18,155 crore in the year-ago period.

However, total income of the bank during the quarter under review dropped to Rs 92,184 crore from Rs 99,200 crore in the same period a year ago, HDFC Bank said in a regulatory filing.

The lender’s interest income increased to Rs 79,363 crore from Rs 77,470 crore in the same quarter a year ago.

During the period, operating profit of the bank declined to Rs 28,169 crore, as compared to Rs 35,734 crore in the same quarter a year ago.

Net interest income grew 7 per cent to Rs 33,530 crore for the June quarter from Rs 31,440 crore a year ago, it said.

Net interest margin was at 3.26 per cent on total assets, and 3 per cent based on interest-earning assets.