- HDFC Bank appointed external auditors to review Atanu Chakraborty's exit as chairman and director
- Chakraborty cited ethical differences with the bank but did not provide specific details
- HDFC Bank shares fell nearly 12% following Chakraborty's resignation announcement
Shares of HDFC Bank Ltd. are in focus heading into trade on Tuesday after the lender appointed external auditors to conduct a thorough review of Atanu Chakraborty's exit as part-time chairman and independent director last week.
Atanu's exit sent shockwaves across the market, as the former executive pointed to ethical differences between him and how the bank operates, without providing further details.
The nature and tone of Chakraborty's comments sent ripples through the stock market, with HDFC Bank's shares taking a sharp fall. Since his announcement, the lender's shares have fallen almost 12% ahead of Tuesday's market open.
Taking cognisance of Atanu's exit, HDFC Bank has hired both international and domestic auditors to probe his resignation while affirming that the reasons specified by Atanu for his exit were not notified to the lender.
Should You Buy HDFC Bank?
Given the recent drawdowns, G Chokkalingam, Founder & MD, Equinomics Research, believes the valuation is quite appealing and has given a 'buy' call on the counter.
"In our view it is appealing buy at current price. If we knock out value attributed to its equity holdings in JVs & subsidiaries, then the stock trades at a valuation of mere 1.7x its FY2026E Adjusted Book Value.
"We expect it's core lending to pick up and the performance of its subsidiaries also to improve going forward. Hence, we reiterate our BUY Recommendation on HDFC Bank," he said.
Independent market analyst Ambareesh Baliga has also suggested a 'buy', but at slightly lower levels.
"My view is to buy HDFC Bank at slightly lower levels - may be another 8% to 10% lower - after more than 5 years of underperformance - several compliance issues coming up - especially when the group was considered a “Gold Standard” in compliance - will surely have some of the long term investors holding for decades - possibly booking out - tired and disappointed with the development.
"However, times like these are a wake-up call for the management and I'm sure this will ensure that there is serious introspection and path correction, which should stand in good stead going ahead. Valuation-wise, it is quoting at possibly a 2 decade low," he said.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.