HDFC Bank falls 7% in 2 days; analysts flag pressure after chairman exit

Analysts believe HDFC Bank stock may be under pressure in the near term due to governance uncertainty and a leadership visibility gap.

Private sector lender HDFC Bank’s shares were trading under pressure on Friday, March 20, 2026. In two trading sessions, the stock has lost nearly 7 per cent after Atanu Chakraborty, part-time chairman and independent director of HDFC Bank, tendered his resignation on March 18, 2026, with immediate effect.

 

At 9:34 AM, HDFC Bank's share price was trading 1.03 per cent lower at ₹791.45 per share. In comparison, BSE Sensex was up 1.2 per cent at 75,097.06. Intra-day the stock fell 2.3 per cent to day's low at ₹781 per share.

 

In his resignation letter, Atanu Chakraborty alleged that “certain happenings and practices” observed over the past two years were “not in congruence with his personal values and ethics”, while also clarifying that there are no other material reasons for his resignation.

 

 

However, during a conference call, the bank clarified that this development occurred without any cited material concerns in the past and mentioned that there are no governance, operational, or regulatory issues that have been brought to the board’s attention prior to the resignation.

 

Analysts believe the stock may be under pressure in the near term due to governance uncertainty and a leadership visibility gap.   CATCH STOCK MARKET UPDATES TODAY LIVE

Brokerages’ view on HDFC Bank 

Nomura | Buy | Target: ₹1,080

The brokerage said that governance uncertainty and a leadership visibility gap are likely to keep the stock under pressure in the near term. It flagged key monitorables as appointment of permanent chairman, clarity on CEO reappointment/succession, absence of further exits, and continued execution and delivery post-merger.

Motilal Oswal Financial Services | Buy | Target cut to ₹1,100 from ₹1,175

Motilal Oswal noted that the development has dampened investor sentiment and comes at a time when the markets are already grappling with a lot of macro-uncertainty. 

 

However, the assurance from the management team, Mistry’s appointment as an interim chairman, and the Reserve Bank of India’s (RBI’s) endorsement of the bank’s corporate governance and compliance standards have helped assuage some of the concerns. 

 

Going ahead, analysts reckon the appointment of the new Chairman and the submission of Sashi Jagdishan’s name for the next CEO term (term due in October 2026) will help restore investor trust. Meanwhile, the improved operating performance in the coming year will be critical to stock performance. The swift regulatory engagement and interim leadership appointment do provide comfort on operational continuity. 

 

The brokerage maintained its earnings estimates and expects reurn on asset/ return on equity (RoA/RoE) at 1.9 per cent/14.5 per cent by FY27E. 

Emkay Global Financial Services | Buy | Target: ₹1,225 

Following the recent correction, the brokerage believes the valuations appear attractive for a bank on the cusp of a post-merger turnaround. However, it flagged, HDFC Bank needs to rebuild leadership strength and soon clarify on the current MD’s term extension beyond Oct-26, along with the appointment of a credible long-tenure Chairman, which may otherwise remain a drag on the stock in the near term. 

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JM Financial Institutional Securities | Add | Target: ₹1,050

The brokerage noted that the near-term stock performance may remain under pressure as investors would like to have more comfort in the management/board after this episode. The upcoming MD & CEO’s renewal in a few months' time may also put pressure on stock price performance. 

 

JM Financial has been less bullish on HDFC Bank since the last few months, though concerns have been on fundamentals. The stock is down 19 per cent in the last three months. It is currently trading at a lower valuation of ~1.5xFY28 adjusted BVPS with current 1-year forward adj. P/B being 1.25SD below the historical mean. While valuation remains attractive given franchise strength, the above highlighted concerns imply a range-bound stock price outcome in the near term.   Disclaimer: The views and investment tips expressed by the analysts in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.