Shares of HDFC Bank, India's leading private sector lender, remained under selling pressure for the third straight session on Wednesday, January 7, 2026. The stock declined 1.6% to hit an intraday low of ₹947.20, extending its cumulative loss over the three-day period to more than 5%.
What's Driving the Downtrend?
The recent correction follows the bank's business update for the December quarter (Q3 FY26), released on January 5. While the bank reported growth, the numbers appear to have disappointed some market participants. HDFC Bank's gross advances grew by 11.9% year-on-year (YoY) to approximately ₹28,445 billion as of December 31, 2025. Average deposits for Q3FY26 increased by 12.2% YoY to ₹27,524 billion.
However, analysts point to deposit growth as a key area of concern. "The key concern appears to be deposit growth. Deposit accretion was lower than market expectations, especially when compared to the previous quarter," said Ajit Mishra, SVP of Research at Religare Broking. He added that profit-booking after the stock's outperformance last year is also a likely factor.
Analyst Views: Buy on Dips or Wait?
Despite the short-term weakness, several experts maintain a positive long-term outlook, citing the bank's strong fundamentals. Seema Srivastava, Senior Research Analyst at SMC Global Securities, highlighted HDFC Bank's focus on deposit growth, superior return on equity, and market leadership as justifying core holdings.
Ajit Mishra of Religare Broking has a 'buy' rating on the stock with a target price of ₹1,220. "We remain positive and would recommend buying the stock. This correction presents a buy-on-dips opportunity, especially for long-term investors," Mishra stated.
From a technical perspective, however, some analysts advise caution. Aakash Shah, a research analyst at Choice Broking, noted that the stock is currently trading below its 200-day Exponential Moving Average (EMA), situated near ₹963, indicating a weak setup.
"The stock witnessed intraday selling pressure and slipped below the 200-day EMA... Overall, the stock continues to move in a broad consolidation phase," Shah observed. He identified ₹950 as immediate support, with a break below potentially leading to a fall towards ₹930–920. Shah emphasized that a sustained move above the ₹965 resistance zone is needed for the technical view to improve.
What to Expect from Q3 Earnings?
All eyes are now on the bank's official third-quarter results, scheduled for announcement on January 17, 2026. According to estimates from Systematix Research, HDFC Bank's Q3 profit after tax (PAT) may grow by a healthy 11.2% YoY. Operating profit is projected to climb 7.8% YoY, while net interest income (NII) may see a rise of 6.4% YoY.
Over the past year, HDFC Bank shares have gained 11%, outperforming the Sensex's 8.5% rise but underperforming the BSE Bankex's 18% surge. The stock had touched a 52-week high of ₹1,020.35 on October 23, 2025.
Investors are thus faced with a mixed picture: robust long-term fundamentals and positive earnings expectations against near-term technical weakness and concerns over deposit growth. The upcoming quarterly results will be crucial in providing the next directional cue for the stock.
