HDFC Bank is trading at relatively low levels

HDFC Bank is trading at relatively low levels mainly because the market is worried about a combination of weak margins, slower-quality growth and leadership uncertainty, rather than because the bank has suddenly become fundamentally weak. The biggest issue is NIM compression: Q1 FY27 NIM fell to 3.26%, the lowest level reported, from 3.38% in Q4 FY26. At the same time, the CASA ratio declined to 32.3% from 34.1%, meaning a greater portion of deposits is coming from relatively expensive term deposits, putting pressure on funding costs. A second major reason is the CEO transition. Sashidhar Jagdishan will retire on October 26, 2026, and the market is waiting for clarity on his successor. The uncertainty has increased the risk premium on the stock, particularly after Chairman Atanu Chakraborty also left earlier this year. HDFC Bank shares recently touched a 30-month low, and Reuters reported that the stock was down about 28.5% in 2026 by the end of August.