HDFC Bank shares jumped more than 5% in two days to hit the highest level since March after India’s largest private lender released its Q1 business update on July 5, strongly boosting investor sentiment. However, the shares erased all gains and dropped further, falling more than 10% over seven sessions of losses after the company released its actual Q1 results later that month.
The earnings may not have been the only trigger but a catalyst to the already ongoing selloff as leadership worries kept investors on the edge. This came after former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank did not match his personal values and ethics. The governance cloud led to a massive selloff that recovered slightly after the bank made leadership changes.
HDFC Bank's leadership worries clear
The scenario has changed now as the bank heads towards the Q2 earnings season. HDFC Bank recently appointed ICICI veteran Anup Bagchi as its Managing Director and CEO, with RBI approving his appointment for a three-year term from October 27 onwards. Nomura earlier had said that a credible external candidate could offer a longer runway and a cleaner slate. “In our view, this could be more significant for the stock over the medium term, as a new leader would have greater scope to reassess strategy, challenge existing practices and drive a strategic reset. With the stock having materially underperformed, a credible external appointment with a strong operating track record could therefore emerge as a catalyst for a re-rating, particularly if accompanied by a clear roadmap on growth, deposits, margins and returns,” it explained.Also read |Nifty’s ailing warhorse HDFC Bank gets an all-rounder CEO. Can Anup Bagchi make the elephant dance?
Last week, the company released its Q2 business update, saying its average advances under management stood at Rs 31.87 lakh crore in the September 2026 quarter, up around 14% from Rs 27.95 lakh crore in the corresponding quarter last year. Period-end advances under management stood at approximately Rs 33.08 lakh crore as of September 30, 2026, marking growth of around 15.3% from Rs 28.69 lakh crore a year earlier.
What to expect for HDFC Bank shares as Q2 earnings approach?
Investors are now eyeing the bank’s Q2 earnings scheduled for October 17. Meanwhile, analysts see limited downside in the stock after a sharp downturn seen this year so far. Sunny Agrawal, Deputy Vice President of Fundamental Research at SBI Securities, said that pattern seen after Q1 results may not be repeated this time as HDFC Bank shares have already witnessed sharp correction and with new leadership at the helm, the street will be keen to explore the growth strategy of the bank.He noted that robust provisional business updates gives confidence that balance growth is robust and NIM coupled with asset quality will be the key monitorable. Dnyanada Vaidya, Research Analyst on BFSI at Axis Direct, also noted that HDFC Bank's Q2 provisional update showed strength in business momentum and this is expected to translate into steady financial performance.
While margins will contract sequentially, the analyst expects benign credit costs and improving operating leverage to support earnings. During Q1 earnings there was uncertainty around the MD and CEO reappointment, which has now been addressed with the appointment of Mr Anup Bagchi for a three-year term, he highlighted.
“The stock has corrected sharply and with the outlook turning favourable over the medium term with a more optimistic outlook on growth and margins, we see limited downside in the stock,” Vaidya from Axis Direct said.
Also read |Explained: How RBI rate hike may impact Sensex, Nifty after 8-week losing streak
Technical outlook for HDFC Bank share price
HDFC Bank has been hovering around its major support zone of Rs 720–700 on the weekly chart, said Sudeep Shah, Vice President of Technical and Derivatives Research at SBI Securities. He noted that the stock continues to trade below key moving averages, indicating that the broader trend remains weak. Despite the recent minor pullback from the lows, the overall price structure remains largely unchanged.Hitesh Rathi, Technical Analyst (Equity & Derivatives) at Angel One, also said that HDFC Bank remains firmly aligned with an established primary downtrend, with the stock continuing to form a sequence of lower highs and lower lows since the beginning of the year. Any intermittent bounce or rally within a downtrend can be viewed as part of a secondary trend or a potential dead-cat bounce, and the nature of the current up move also appears to be similar, according to the analyst.
“That said, the stock is currently positioned very close to a sacrosanct support band, marked by a crucial swing low that has defended prices on multiple occasions over the past few years. Given the proximity of the current price to this important support zone, a short-term bounce, similar to the one witnessed following the Q1 results, cannot be ruled out,” he said, adding that a decisive move below the recent lows around the 680 mark is likely to further exacerbate the ongoing downtrend and exert additional selling pressure on the stock.
Shah sees the stock finding immediate resistance in the Rs 750–755 zone, which coincides with the 20-week EMA. A decisive and sustained move above this zone could extend the pullback in the near term. On the downside, Rs 685–680 is likely to act as the next key support zone, according to the technical analyst.
Also read | How to trade HDFC Bank shares after new CEO appointment? Technical indicators still signal weakness
Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)