Brokerages have retained their constructive stance on HDFC Bank after the lender announced key leadership appointments, saying the management changes strengthen governance and are unrelated to the bank's underlying business fundamentals.
Jefferies maintained its Buy rating on HDFC Bank with a target price of Rs 1,050, calling the appointment of former Finance Secretary Rajiv Kumar as Chairman-designate and Puneet Sharma, the current Axis Bank CFO, as the bank's new Chief Financial Officer a positive step in the succession process. The brokerage noted that the appointments could be followed by a renewal of CEO Sashidhar Jagdishan's tenure and reiterated that HDFC Bank remains one of its top banking picks.
Kotak Institutional Equities echoed a similar view, saying HDFC Bank has strengthened its leadership through the new appointments. It does not view the resignation of Axis Bank CFO Puneet Sharma or Bandhan Bank CFO Rajeev Mantri as negative developments for the respective banks, arguing that the moves appear to be driven by individual career decisions rather than institution-specific concerns.
ALSO READ: Who Is Rajiv Kumar, The Architect Of Mega PSB Mergers Tapped To Helm HDFC Bank
According to Jefferies, Rajiv Kumar's experience as Finance Secretary, Chief Election Commissioner and Chairman of the Public Enterprises Selection Board brings significant policy, governance and regulatory expertise to the bank. The brokerage also believes the appointments reinforce confidence in HDFC Bank's long-term investment thesis, which is centred on improving deposit mobilisation, cross-selling opportunities following the HDFC merger and continued operational efficiencies.
Kotak added that both Axis Bank and Bandhan Bank have largely navigated the asset-quality pressures that emerged from unsecured retail lending and microfinance exposure, respectively. It expects operating performance and asset quality at both lenders to improve gradually over the coming quarters.
More broadly, Kotak remains constructive on the banking sector, supported by attractive valuations, improving profitability and favourable risk-reward dynamics. The brokerage expects better funding access through lower-cost deposits, resilient corporate balance sheets and a benign MSME credit environment to support earnings growth.
Among private lenders, Kotak continues to prefer HDFC Bank and ICICI Bank, while State Bank of India remains its preferred public sector lender.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.