HDFC Bank share price hit 52-week low of ₹704.15 per share after opening higher on Monday. The private lender stock initially rose over 2.5%; however, it pared its gains in the second half of the trading session, falling as much as 5% from its intraday high.
The banking stock closed at ₹709, as compared to the opening price of ₹723.05 per share on Monday.
The volatility in the banking stock came after MD and CEO Sashidhar Jagdishan announced that he would not seek re-appointment for another term after his current tenure ends on October 26, 2026.
HDFC Bank CEO resignation details
According to a regulatory filing by HDFC Bank, Sashidhar Jagdishan has decided not to seek another term as the bank’s Managing Director and CEO, despite efforts by the board to persuade him to continue in the position.
Jagdishan’s current tenure is set to end on October 26, 2026. In acknowledging his decision, the bank’s board praised his leadership and contribution to HDFC Bank’s growth and stability. It also credited him with playing a key role in the successful completion of the merger, one of the largest corporate mergers in India.
Jagdishan joined HDFC Bank in 1996 as a manager in the finance division and held several senior positions during his nearly three-decade association with the lender before being appointed as CEO.
Following his decision to step down, the board has begun the process of finding his successor. His decision has left the bank with a shorter-than-usual window to manage the leadership transition. Typically, banks initiate the process of seeking the Reserve Bank of India’s approval for the reappointment of a CEO around six months before the incumbent’s tenure ends. In Jagdishan’s case, the board had approved his reappointment in March 2023, roughly seven months before his earlier term was due to expire.
Meanwhile, a Reuters report said V. Srinivasa Rangan and Bharucha were among the prominent candidates being considered for the top role. Bharucha, who has nearly 35 years of banking experience, has served as HDFC Bank’s Deputy Managing Director since April 19, 2023. The lender may also evaluate external candidates, as RBI regulations require banks to submit multiple names for consideration for the CEO position.
HDFC Bank shares have remained in the spotlight since former part-time chairman Atanu Chakraborty resigned in March this year, citing concerns over certain practices that were inconsistent with his values and ethical principles. His exit had also raised questions about corporate governance at the private sector lender.
What should investors do?
Brokerage firm Motilal Oswal has revised its target price for HDFC Bank to ₹925 while retaining its ‘Buy’ rating. The brokerage said the recent changes in the bank’s leadership could help ease investor concerns and address the scepticism surrounding the lender. It added that a new leadership team, coupled with an improvement in the bank’s growth and earnings trajectory, could help boost investor sentiment.
Motilal Oswal expects HDFC Bank to deliver stronger earnings growth from FY28 onwards, while maintaining return on assets (RoA) at around 1.8%. The brokerage has based its revised target price of ₹925 on 1.8x FY28E adjusted book value (ABV), along with ₹128 attributed to subsidiaries, while continuing to recommend a ‘Buy’ on the stock.
Meanwhile, Mahesh M Ojha, VP – Research & Business Development at Kantilal Chhaganlal Securities, said investors could consider HDFC Bank shares at current levels. He said the stock presents an attractive opportunity for long-term investors, supported by the bank’s strong fundamentals and growth prospects. Ojha advised investors to accumulate the shares gradually rather than taking a large position in a single transaction.
HDFC Bank share price trend
HDFC Bank share price has remained in red amid weak market sentiments. The banking stock has descended 2.54% in a week and 5.23% in a month.
Furthermore, the private lender stock has corrected over 28.47% on year-to-date (YTD) basis and 25% in a year.
Looking at the broader level, the stock has failed to impress long-term investors as well by falling over 10% in three years and five years.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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