India's largest private sector lender HDFC Bank is experiencing its most challenging week in nearly a year, with shares declining for five consecutive trading days. The stock fell another 1.50% on Friday, January 9, extending a losing streak that has wiped out significant shareholder value.

Weekly Performance and Market Impact

The sustained decline has resulted in HDFC Bank's worst weekly performance since January 2024, when the stock had declined 10.00% during the week ending January 19. This week's 6.50% decline represents a significant setback for the banking giant.

The market capitalization impact has been substantial, with HDFC Bank losing over ₹1 lakh crore in value during this period. The bank's market cap declined from ₹15.49 lakh crore at the end of last Friday to ₹14.39 lakh crore currently.

Business Performance Highlights

Despite the stock's poor performance, HDFC Bank reported encouraging business metrics in its third quarter update earlier this week. The bank achieved double-digit loan growth for the first time since its merger with HDFC, with the loan book expanding by 12.00%.

Deposits grew in line with advances at 11.50%, maintaining a balanced growth trajectory. However, the loan-to-deposit ratio increased by 50 basis points to nearly 99.00%, exceeding management's guidance of bringing it down to less than 90.00% in the near term.

Shareholding Pattern Changes

Retail shareholders have been steadily reducing their exposure to HDFC Bank, reflecting changing investor sentiment. Their holding declined to 9.41% as of December 2025, marking the lowest level in the last 20 quarters according to historical shareholding data from stock exchanges. Retail shareholders typically own about 7.50% of Indian equities overall.

Current Trading and Outlook

Shares of HDFC Bank are currently trading 1.10% lower at ₹935.90. The market will closely watch the bank's third quarter results, scheduled for release on Saturday, January 17, for further insights into the lender's operational performance and management commentary on key metrics.

The upcoming results announcement will be particularly significant given the recent stock performance and investor concerns about the elevated loan-to-deposit ratio, which remains well above management's stated targets.

HDFC Bank shares extended their losing streak to a fifth consecutive session on January 9, declining as much as 1% to an intraday low of ₹938. The stock has shed 6% over this period, with investors awaiting the bank's third-quarter earnings announcement scheduled for January 17.

Technical Analysis Points to Bearish Momentum

Technical analysts are highlighting concerning chart patterns for the banking stock. According to Aakash Shah, Technical Research Analyst at Choice Equity Broking, the stock is displaying a clear bearish structure on the daily chart.

The breakdown from the ₹1,000-1,020 resistance zone has triggered strong selling pressure, leading to lower highs and lower lows. Shah noted that bearish candles supported by higher volumes point toward distribution rather than a healthy correction.

Support Levels and Downside Risks

Vatsal Bhuva of LKP Securities echoed the bearish sentiment, highlighting that the RSI has entered a bearish crossover and is placed near 26, indicating an oversold condition. Both analysts identified key support and resistance levels for the stock.

Analysts suggest that failure to hold the ₹935-940 support zone could lead to further downside toward ₹900, which aligns with the 100 EMA on the weekly chart.

Q3 Earnings Expectations

Despite the technical weakness, brokerages maintain a mixed to positive outlook for the December quarter performance. Management has indicated that most of the asset-side repricing is now behind, and net interest margins (NIMs) are expected to benefit from the downward repricing of term deposits.

Yes Securities expects the bank to report sequential loan growth in the 2.5% range. However, net interest income (NII) growth is expected to trail loan growth marginally, as the decline in yields on advances is seen outpacing the reduction in cost of deposits, likely causing NIMs to soften sequentially.

Brokerage Targets Remain Optimistic

Despite recent price weakness, several brokerages maintain positive long-term outlook with substantial upside targets.

Axis Securities notes that HDFC Bank has remained largely on track with its guidance as it works towards reverting to pre-merger levels across key metrics. With the loan-to-deposit ratio (LDR) now below 100%, the bank is likely to accelerate growth in FY26 to align with system-wide trends.

InCred Equities expects margins to trough at levels better than earlier anticipated, and together with benign asset quality trends and sustained deposit growth momentum, this should support a rerating of the stock in the coming months. The brokerage anticipates that margin pressure seen in H1 is expected to ease in H2, supported by deposit repricing and the impact of CRR cuts on exit margins.