- HDFC Bank chairman Atanu Chakraborty resigned citing ethical concerns causing uncertainty
- BofA Securities and Jefferies maintained buy ratings citing strong fundamentals and attractive valuations
- Kotak Securities is cautious, warning that unclear exit reasons may cause valuation de-rating
Brokerages have largely maintained a constructive stance on HDFC Bank Ltd. even as the unexpected exit of its chairman has introduced a degree of uncertainty. Most analysts have citied strong fundamentals and attractive valuations as key supports. The current market price of HDFC Bank is Rs 800.
BofA Securities reiterated its 'buy' rating on the stock with a target price of Rs 1,175, noting that while the sudden leadership change adds to near‑term uncertainty, the bank's underlying fundamentals remain intact. The brokerage believes the exit reflects personal differences between outgoing chairman Atanu Chakraborty and senior management, rather than governance issues. BofA stressed on HDFC Bank's consistent track record of best‑in‑class governance, with no significant concerns over the past 25 years. It remains constructive on the stock at current valuations and improving operating performance, adding that a sustainable improvement in loan growth will be critical to drive the next phase of re‑rating.
Like BofA, even Jefferies also maintained a Buy rating, with a higher target price of Rs 1,240. The brokerage said comments from the outgoing chairman asserting "no wrongdoing," along with clarifications from the Reserve Bank of India, were comforting for investors. Jefferies added that HDFC Bank's valuation still remains attractive, despite recent developments.
| Brokerage | Target Price | Rating |
| BofA Securities | Rs 1,175 | Buy |
| Jefferies | Rs 1,240 | Buy |
| Kotak Securities | Rs 1,050 | Buy |
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Kotak Securities, has maintained 'buy' rating and a target price of Rs 1,050 but are a bit cautious on the stock. The brokerage said that while stability has been reaffirmed, limited clarity on the reasons behind the chairman's exit is likely to remain an overhang. This could prompt heightened investor scrutiny around senior management changes and renewal timelines. Kotak warned that the uncertainty poses a risk of valuation de‑rating despite steady execution, with the discount to ICICI Bank potentially widening and valuation premiums converging to Axis Bank.
Shares of HDFC Bank slipped over 5% on Thursday after Atanu Chakraborty resigned as chairman of the country's second biggest lender, citing ethical concerns.
The blue-chip stock tumbled 5.13% to settle at Rs 799.70 on the BSE, trimming some of its sharp early losses. During the day, it tanked 8.41% to Rs 772 -- its 52-week low. At the NSE, the stock dropped 5.31% to close at Rs 798.20. Intra-day, it dived 8.66% to hit the 52-week low of Rs 770.
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