HDFC Bank underperformance: what changed since 2023

HDFC Bank has become a heavily debated large-cap on Indian social feeds. The discussion is not centred on a sudden earnings collapse. It is about why a market leader has still struggled to deliver returns since 2023.

Where the share price stands in June 2026

Posts tracking early June trading put HDFC Bank around Rs 753 to Rs 766. Several snapshots flag a year-to-date fall of roughly 23% to 25% in 2026. One widely shared note also highlights the stock is about 26.8% below its 52-week high. Shorter windows show sharp pressure, including about 6% down in a week and around 4% down in a month in one recap. Another market summary cited a steeper one-month drop of 14.75% during a broader market decline. Across longer horizons, social dashboards repeatedly cited around 7% down over three years and about 2% down over five years. These numbers are being used to frame the stock as a rare large-cap laggard in private banking. The overall takeaway in these discussions is simple: the stock has not behaved like a default compounder recently.

A sell-off framed as a governance discount

A repeated phrase in social posts is that the sell-off is a “governance discount”. Some commentary explicitly says the decline is not driven by bad earnings. The key trigger cited is the former chairman’s resignation, which amplified uncertainty. Alongside this, posts mention an internal probe into marketing spend. That combination has kept many investors cautious even after small bounce-backs. Several threads describe the market as methodical in applying the discount rather than panic selling. The stock is also described as one of the worst-performing large-cap private bank names on the NSE in 2026. Importantly, this framing shifts the debate from quarterly numbers to trust and oversight. In that setup, even good results can struggle to change price action quickly.

Leadership and trust: why succession is in focus

Social summaries link the underperformance since July 2024 to governance concerns and leadership succession uncertainty. One widely circulated note says sentiment weakened sharply after former chairman Atanu Chakraborty resigned unexpectedly in March. The same narrative says the resignation cited concerns linked to certain practices at the bank. This created a fresh layer of “wait and watch” behaviour among investors. Retail posts also point to the size of the shareholder base, around 42 lakh, as a reason the topic trends fast. A large shareholder base tends to amplify the effect of each news update. Analysts cited in the social chatter appear divided between patience and buy-the-dip calls. The split largely depends on how quickly the governance overhang fades. Until then, investors are treating management commentary as a key signal.

Post-merger digestion: deposits, NIM and ROA debates

Another major theme is post-merger transition and margin normalisation uncertainty. Posts link stock performance to deposit growth constraints and net interest margin pressure. The merger period is described as creating optical issues in the balance sheet. Specifically, social commentary notes the merging of an NBFC’s borrowings into a bank balance sheet changed optics. That coincided with a phase where deposit growth lagged loan growth, as discussed online. Investors also debated whether the digestion phase is now largely behind the bank in 2026. These points matter because they influence expectations for ROA recovery. Several posts emphasise that HDFC Bank has shifted from a “no-debate compounder” to a stock needing monitoring. The recurring watchlist items are margins, deposit growth, and ROA trends.

Fundamentals that bulls keep citing

Despite price weakness, multiple posts argue the franchise is intact. One widely shared metric set shows interest earned rose from ₹1,14,812.65 Cr in March 2020 to ₹3,00,517.04 Cr by March 2025. The same set shows profit after tax increased from ₹26,257.32 Cr to ₹67,347.36 Cr over that period. Social summaries also note substantial growth in total assets and liabilities, without detailing every line item. The repeated conclusion from those posts is that core financial performance has been robust. In June 2026 chatter, some “value buyer” posts cite strong Q4 FY26 results with 9.11% year-on-year profit growth. The same discussion mentions a confirmed Rs 13 per share dividend. That combination is used to argue fundamentals are not “broken”. Even so, posters acknowledge fundamentals alone may not remove a governance discount quickly.

Valuation reset: from expensive to more comfortable

Valuation is another frequent anchor for the debate. One older valuation snapshot, dated May 5, 2025, described the stock as overvalued with a PE ratio of 22.51 and a cited price of 1981.10. More recent posts focus on a simpler framing: valuation comfort has improved after the correction. At around Rs 766, some notes say the bank trades near 2 times trailing consolidated net worth. Those posts compare it with about 2.6 times in July 2024 and 3.9 times five years ago. This is presented as a meaningful compression in multiples versus history. For many investors online, this creates a “margin of safety” argument. For others, lower multiples reflect unresolved uncertainty, not just opportunity. The practical takeaway in these threads is that valuation has improved, but it is not the only variable.

What technical analysts say about the near-term trend

Technical talk is also trending, especially after sharp down days. One market note says the stock is trading below key moving averages across multiple timeframes. It lists weakness below the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Another trading view describes the near trend as sideways after a broad consolidation. It also flags resistance near the 50 DEMA, placed around ₹795 in that note. That view says a breakout above that level is needed for positive momentum. On the downside, it highlights ₹725 as an immediate support based on the swing low. Separately, a market summary described the price moving close to a 52-week low and being just 2.22% above Rs 740.95. Together, these signals reflect cautious positioning rather than aggressive accumulation.

Relative underperformance versus indices keeps the story alive

Several posts explicitly compare HDFC Bank with the Nifty Bank index and the Sensex. One widely shared comparison says the stock underperformed the Nifty Bank since July 2024. It cites an adjusted decline of 5.3% for the stock versus a 6.2% gain for the benchmark. Another snapshot compares multiple periods and concludes HDFC Bank has lagged the Sensex over the past week, month, and year. It also notes that ten-year performance remains strong, with a 188.53% gain close to the Sensex’s 190.76% rise. This mix fuels the argument that the recent phase is the outlier, not the identity. But the repeated relative-underperformance charts keep the narrative in motion. For institutional-style investors, this becomes an opportunity cost discussion. For retail investors, it becomes a patience test.

What could change sentiment from here

Across posts, the clearest potential catalyst is a reduction in governance overhang. Commentary also highlights the need for cleaner management communication as a confidence reset. A second watchpoint is whether deposit cost pressure moderates, as mentioned in analyst-style summaries. A third is evidence that margin normalisation is stabilising after the merger digestion phase. Bullish posts also point to credit expansion and cross-sell synergies as medium-term supports. Bearish posts argue the stock’s historical underperformance may cap near-term upside. A balanced view in the discussion is that the bank is not broken, but new exposure warrants patience. Most threads converge on a simple checklist: governance clarity, deposit trends, and margin direction. Until those improve, the stock may keep swinging between value buying and trust-driven selling.