Shares of HDFC Bank Ltd extended their sharp decline for a second straight session on Tuesday, emerging as the top loser on the Nifty 50, even as the benchmark indices traded largely flat. Earlier this week, brokerages maintained bullish ratings on India's largest private sector lender following its fiscal first quarter earnings.

HDFC Bank stock fell 1.1 percent to Rs 769 in morning trade after tumbling 5.1 percent on Monday in the first session following its quarterly results. HDFC Bank shares have now declined 22.4 percent so far in 2026, significantly underperforming the Nifty 50, which is down 7.3 percent over the same period.

At 10:00 am IST, the Sensex was down 74.51 points, or 0.10 percent, at 77,634.01, while the Nifty 50 slipped 7.20 points, or 0.03 percent, to 24,231.30. The Nifty Bank index was marginally higher by 0.07 percent, while the Nifty Private Bank index gained 0.17 percent, indicating that the weakness was largely stock-specific. India VIX declined 1.62 percent, while the Nifty Midcap 100 and Nifty Smallcap 100 indices both advanced 0.17 percent.

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HDFC Bank on Saturday reported a standalone net profit of Rs 19,059.72 crore for the April-June quarter (Q1 FY27), up 4.98 percent year-on-year but marginally below the CNBC-TV18 poll estimate of Rs 19,332 crore. Net interest income (NII) increased 6.7 percent to Rs 33,535.95 crore, also below the poll estimate of Rs 34,353 crore.

The bank reported a net interest margin (NIM) of 3.26 percent on total assets and 3.40 percent based on interest-earning assets. Gross non-performing assets (GNPAs) stood at 1.17 percent of gross advances as of June 30, 2026, compared with 1.15 percent three months earlier and 1.40 percent a year ago. Net non-performing assets (NNPAs) were at 0.41 percent.

Brokerages remained constructive on HDFC Bank despite the modest earnings miss, with Jefferies, Bernstein and Nomura retaining positive ratings on the stock. They highlighted healthy loan and balance sheet growth, stable asset quality, disciplined operating expenses and lower credit costs, while viewing the June quarter performance as broadly in line with expectations.

However, analysts also flagged persistent pressure on net interest margins as higher corporate lending, adverse movements in loan yields and funding costs weighed on profitability. Even so, they expect growth momentum to improve, supported by stronger loan and deposit growth and continued operating efficiency.