HDFC Bank shares drop 2%. What lies ahead as lender set to announce Q1 earnings this week?
After opening, HDFC Bank shares fell to Rs 811 apiece, snapping a two-session gaining streak. The market capitalisation of India’s largest private lender dropped to Rs 12.49 lakh crore.
HDFC Bank is all set to release its results for the April-June quarter of FY26 on Saturday. The shares recorded sharp gains last week after the company released Q1 business update, reporting gross advances at Rs 30.61 lakh crore at the end of the April-June quarter of FY27, marking a 15.4% year-on-year (YoY) rise from Rs 26.53 lakh crore reported in the corresponding quarter of the previous financial year. Its period-end advances under management stood at around Rs 31.27 lakh crore as of June 30, 2026. This implies a growth of around 12.4% YoY over Rs 27.82 lakh crore advances under management reported as of June 30, 2025.
Also read: HDFC Bank Q1 business update | Gross advances rise 15% to Rs 30.61 lakh crore
What to expect from HDFC Bank’s Q1 earnings?
Motilal Oswal Financial Services said that its channel checks signal towards a strong MSME credit demand in the April-June quarter of the ongoing FY27, with an increase in the working capital cycle. Private banks’ share is higher among higher ticket sizes, while public sector banks are gaining incremental market share with competitive pricing and CGTMSE-backed lending, the domestic brokerage added.
HDFC Bank was named as one of Motilal Oswal’s top picks in the banking sector. The domestic brokerage said that the private lender is faring well in the HCV and MHCV segments. It is also among its top picks for loan against property segment, and in terms of asset quality. The shares of India’s largest private lender gained over 7% in one month but declined 20% in 2026 so far. Motilal Oswal has a ‘Buy’ call on the shares of HDFC Bank with a target price of Rs 1,100 apiece.
HDFC Bank cuts workforce amid AI ramp up
HDFC Bank has reduced its employee count by 3,343 persons, or 1.56% to 2.11 lakh in the financial year 2026, from 2.15 lakh reported at the end of the previous financial year, according to its FY26 annual report. The company’s total employee expenses stood at Rs 26,050 crore. The percentage of women in the workforce rose to 26.6% at the end of FY26, from 26.1% at the end of FY25.
“At HDFC Bank, we have built a strong digital foundation over the years. Today, the nature of capability building on this foundation is evolving. Artificial Intelligence, particularly GenAI, is emerging as a defining force in the next phase of banking,” said the lender’s interim part-time Chairman Keki M Mistry.
He added that the lender’s approach to artificial intelligence has been deliberate and measured. It sees AI not as a standalone capability, but as an embedded capability that will increasingly influence how banking services evolve. This calls for a focus on building systems that can adapt, learn and improve over time, supported by a unified, in-house foundation, ‘Neev’, that enables consistency, scale and the disciplined rollout of capabilities across the Bank through structured programmes, Mistry further said.
HDFC Bank’s real estate exposure
HDFC Bank’s FY26 annual report shows that the bank’s exposure to the real estate sector stood at more than Rs 10 lakh crore as on March 31, 2026. This marked an 8% increase from Rs 9.26 lakh crore reported in the corresponding period of the previous year. Notably, the bank’s total advances meanwhile stood at Rs 29.37 lakh crore at the end of FY26. Residential mortgages accounted for the biggest chunk in the real estate portfolio at Rs 7.39 lakh crore. Commercial real estate mortgages meanwhile stood at Rs 2.13 lakh crore. The company also reported Rs 50,844 crore in exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs).
HDFC Bank share price
HDFC Bank shares have fallen more than 1.5% in one week but gained nearly 6% in one month. The stock has fallen around 18% in 2026 so far. In the longer term, the stock has dropped around 18% in one year, but gained 9% in five years.
Also read: Motilal Oswal’s top 4 banking picks ahead of Q1 earnings season. Do you own any?
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