HDFC Bank Share Price Falls 25% in Year-to-Date Period, Raising Concerns Over its Performance.

HDFC Bank Under Pressure Amid Controversy and Regulatory Scrutiny

HDFC Bank shares have been under pressure over the last few weeks, particularly after the abrupt resignation of part-time Chairman Atanu Chakraborty on March 18, 2026, citing ethical and value-based reasons. The controversy surrounding India's largest private lender has shown no signs of abating, as Chakraborty's resignation was soon followed by reports indicating potential action against 12 more executives over the alleged mis-selling of additional tier-1 (AT-1) bonds.

The recent underperformance of HDFC Bank shares reflects a convergence of internal adjustments and external pressures rather than a deterioration in its core franchise, according to Hariprasad K, a SEBI-registered Research Analyst & Founder of Livelong Wealth. The stock has been caught in a "reset phase" following the HDFC Ltd merger, where balance sheet normalisation has taken priority over aggressive growth. Elevated credit-deposit ratios and margin compression have forced the bank to slow loan expansion and compete harder for deposits, weighing on near-term profitability and investor expectations.

The sudden leadership exit and governance-related noise have unsettled institutional confidence, leading to valuation de-rating, even in the absence of any material regulatory red flags. This has been further amplified by a risk-off global environment, where rising crude prices, currency pressure, and sustained FII outflows have disproportionately impacted large-cap financials.

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The fundamentals of HDFC Bank-like organisations do not change after the resignation of a part-time Chairman, according to Sandeep Pandey, Co-founder of Basav Capital & former Deputy Vice President of HDFC Bank. The AT-1 bond row is small from a monetary perspective and will not have a significant impact on the balance sheet of the private lender. In fact, the recent dip in HDFC Bank shares is a golden opportunity for long-term investors who believe in fishing out stocks available at a discounted price.

| Comparison of HDFC Bank's Financials (March 2025 vs. March 2026) | | --- | --- | | Average Advances Under Management (₹ billion) | 26,955 → 29,644 (10.0% growth) | | Period-end Advances Under Management (₹ billion) | 27,733 → 30,575 (10.2% growth) | | Period-end Gross Advances (₹ billion) | 26,435 → 29,600 (12.0% growth) | | Average Deposits (₹ billion) | 25,280 → 28,511 (12.8% growth) | | Average CASA Deposits (₹ billion) | 8,289 → 9,184 (10.8% growth) |

The technical outlook of HDFC Bank shares suggests an attempt to stabilise near key support levels around ₹740 to ₹750. The sustainability of this recovery remains uncertain, and immediate downside risk persists towards the ₹680 zone if supports fail. Any meaningful upside is likely to face resistance in the ₹800 to ₹820 range.

In an exchange filing on Friday, HDFC Bank Ltd updated Indian bourses about its financials, stating that the bank's average advances under management were ₹29,644 billion for the March 2026 quarter, a growth of around 10.0% over ₹26,955 billion for the corresponding March 2025 period. The bank's period-end advances under management were approximately ₹30,575 billion as of March 31, 2026, up around 10.2% from ₹27,733 billion as of March 31, 2025.

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