Jan 6, 2026
Image source: AnadiDevKaushik/www.istockphoto.comThe benchmark equity indices, Sensex and Nifty, extended their losses on Tuesday as investors booked profits in select blue-chip stocks and foreign fund outflows weighed on sentiment.
Trade-related concerns resurfaced after US President Donald Trump warned that tariffs on India could be increased if New Delhi did not curb its purchases of Russian oil.
Foreign institutional investors (FIIs) sold equities worth Rs 362.5 m on Monday following a brief pause, while rising geopolitical tensions after the arrest of Venezuelan President Nicolas Maduro also dampened market sentiment. Adding to the pressure was selling in heavyweight stocks, particularly HDFC Bank.
HDFC Bank, the largest stock on the benchmark indices, fell around 2% on Tuesday, bringing its decline over the past two sessions to more than 4%. Here’s why HDFC Bank is under pressure.
# ADR Falling
HDFC Bank’s American Depositary Receipts (ADRs) witnessed a sharp sell-off overnight, plunging 6.33%, according to an Economic Times report. ADRs represent shares of a foreign company that are listed and traded on US stock exchanges, often reflecting global investor sentiment toward the stock.
The decline marked the second consecutive session of losses for HDFC Bank’s ADRs, which ended at US$ 34.17 on 5 January. The fall came after the bank announced its Q3 FY26 business update, which appears to have disappointed overseas investors and triggered selling pressure.
This weakness in the ADRs likely spilled over into domestic markets, as HDFC Bank shares fell over 1% in early morning trade on Tuesday.
Recent Development
# Q3 Update
In an exchange filing dated 5 January 2025, HDFC Bank reported steady growth across key business parameters for the December quarter.
- Gross advances rose 11.9% YoY to approximately Rs 28,445 billion (bn) as of 31 December 2025, compared with Rs 25,426 bn a year ago.
- Advances under management increased 9.8% YoY to around Rs 29,460 bn, up from Rs 26,839 bn as of 31 December 2024.
- Average deposits grew 12.2% YoY to Rs 27,524 bn in Q3 FY26 from Rs 24,528 bn in the corresponding period last year.
- Average CASA deposits rose 9.9% YoY to Rs 8,984 bn, while average time deposits increased 13.4% YoY to Rs 18,539 bn during the quarter.
- Period-end deposits stood at approximately Rs 28,595 bn as of 31 December 2025, marking an 11.5% YoY increase from Rs 25,638 bn.
- Period-end CASA deposits grew 10.1% YoY to Rs 9,610 bn, compared with Rs 8,727 bn as of 31 December 2024.
What Next?
The bank will disclose its Q3FY26 earnings on 17 January 2026.
Further, according to HDFC Bank Limited’s Q2 FY26 earnings conference call, the bank started the year with a loan-to-deposit ratio (LDR) of around 96%.
The strategic objective laid out at the beginning of the year was that loan growth this year would track the market, while in FY27, it is expected to grow faster than the market, assuming the LDR comes down to below 90%, in the range of 85-90%.
This is the general strategic direction the bank is following. The progression is not expected to be strictly linear, and what matters more is the overall direction-reducing the LDR from 96% to below 90%.
The exact movement of the LDR can vary from quarter to quarter due to seasonal factors, but the key focus remains on the downward trajectory toward the target range.
How shares of HDFC Bank have performed recently
In the past month, the stock is down over 3.5%.
The stock touched its 52-week high of Rs 1,020.4 on 23 October 2025 and its 52-week low of Rs 812.1 on 13 January 2025.
About HDFC Bank
HDFC Bank is India’s leading private sector bank, established in 1994 and commencing operations in 1995. It is the largest private sector bank in India by assets and market capitalisation, making it one of the top banking institutions globally.
HDFC Bank was formed as a subsidiary of the Housing Development Finance Corporation Limited (HDFC Ltd).
In April 2022, HDFC Ltd merged with HDFC Bank, creating the country’s biggest-ever M&A deal.
As of 31 March 2025, the bank’s distribution network was at 9,455 branches and 21,139 ATMs across 4,150 cities/towns.
The bank’s international operations comprise four branches in Hong Kong, Bahrain, Dubai and an IFSC Banking Unit (IBU) in Gujarat International Finance Tech City. It has five representative offices in Kenya, Abu Dhabi, Dubai, London, and Singapore.
To know more check the HDFC Bank fact sheet and latest quarterly results.
You can also compare HDFC Bank with peers on our website.
HDFC Bank vs Kotak Mahindra Bank
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Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
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