The lender’s stock has fallen over 28 per cent so far this year after 12 consecutive years of positive annual returns
HDFC Bank’s shares fell 1.6 per cent on Monday as investors weighed MD & CEO Sashidhar Jagdishan’s decision not to seek another term, with brokerages largely retaining their positive view, but shifting their focus to the country’s largest private sector bank’s next chief executive.The lender’s stock has fallen over 28 per cent so far this year after 12 consecutive years of positive annual returns. During the day, shares of HDFC Bank rose as much as 2.7 per cent before giving up the gains to close 1.6 per cent lower at ₹709, its lowest level in about 30 months.“We view this as a net positive, as it rules out the more feared scenario of a short, RBI-restricted term, and opens up a natural opportunity for the incoming leadership to reset the bank’s narrative,” said Bernstein.next in lineBrokerages see Deputy Managing Director Kaizad Bharucha as the most obvious internal candidate, but his permissible tenure as a whole-time director runs only until 2029, limiting his runway as CEO to only about two years and nine months. Another potential internal candidate is Jimmy Tata, Chief Credit Officer, who has been associated with the bank for more than 30 years.IIFL said a credible external candidate could instead provide a “clean leadership reset and a longer runway to steer the bank”. The lender’s board is expected to consider both internal and external candidates, as it seeks to fast-track the appointment of a successor before Jagdishan’s term ends on October 26.Some of the likely external candidates as per brokerages include ICICI Pru Life CEO Anup Bagchi; HSBC India CEO Hitendra Dave; Banking head at Citibank K Balasubramanian; HDFC Life CEO Vibha Padalkar; Tata Capital CEO Rajiv Sabharwal; Axis Bank CEO Amitabh Chaudhry; and former HDFC Bank DMD Paresh Sukthankar.credible roadmapFor the new management, however, the next challenge extends to the need to revive net interest income growth, improve margins and complete the post-merger balancesheet recalibration. Kotak Institutional Equities said the next CEO would need strong execution capabilities and a credible roadmap to improve margins and profitability.“The next CEO will need to accelerate growth, improve deposit mobilisation/returns, extract merger synergies and, importantly, rebuild confidence around governance and senior-management stability,” said Nomura, adding that the stock could remain under pressure in the near-term until a credible successor becomes a catalyst for re-rating.Macquarie and Bernstein have the highest targets among the latest calls at ₹1,150, followed by UBS having retained ‘buy’ with a ₹1,130 target, while Kotak Institutional Equities has ‘buy’ with a ₹1,050 target.Jefferies, meanwhile, cut its target to ₹880 from ₹1,050, but retained buy, reducing its FY27-FY29 earnings estimates by 3 per cent each because of potential pressure on deposit mobilisation and fee income. The bank’s earnings are expected to improve from FY28, with profit growth recovering to 14 per cent in FY28 from an average of about 9 per cent over FY24-27, said Motilal Oswal, while cutting the stock’s target to ₹925 from ₹1,100.HDFC Bank has had a difficult year after former Chairman Atanu Chakraborty resigned in March as certain practices at the bank were at odds with his “personal values and ethics”, though an external legal review subsequently found no evidence to substantiate those concerns. The bank also faced scrutiny over the MSRDC deposit-pricing matter and other governance issues.Published on August 31, 2026
