Why has HDFC Bank stock rallied over 2% in Monday's trade? Analysts take

Analysts at Jefferies believe that uncertainty can drag EPS & valuations, but after a 27% fall year-to-date at 1.5x PB, the risk-reward for HDFC Bank stock seems balanced.

HDFC Bank share price movement

 

HDFC Bank share price gained 2.5 per cent to ₹738 on the National Stock Exchange (NSE) and BSE in Monday’s intra-day deals in an otherwise weak market. At 09:21 AM, the stock of the private sector lender was the top gainer among the Nifty 50 and 30-share Sensex. In comparison, Nifty and BSE Sensex were down 0.42 per cent and 0.28 per cent, respectively.

 

As per the exchange filings, HDFC Bank Managing Director & Chief Executive Officer (MD & CEO) Sashidhar Jagdishan has decided not to seek a reappointment and will retire on October 26, 2026, despite persuasion from the board, which will fast-track the appointment of his successor.

 

 

The decision comes despite Jagdishan indicating willingness to continue as recently as March and follows heightened governance scrutiny, including former Chairman Atanu Chakraborty’s resignation, the Maharashtra State Road Development Corporation (MSRDC) deposit-related matter and a recent US securities class-action lawsuit.

 

Meanwhile, on Friday, August 28, 2026, HDFC Bank's share price hit an over two-year low of ₹707 on the NSE. The private bank's stock price hit its lowest level since March 1, 2024. Meanwhile, HDFB Bank is set to report its second straight monthly decline, with a 10 per cent fall in the past two months. In August, HDFC Bank’s stock price dropped 4 per cent till Friday, while it slipped 6 per cent in July.

 

Thus far in the calendar year 2026, HDFC Bank underperformed the market by plunging 27 per cent, as compared to a 7 per cent decline in Nifty 50 and 4 per cent fall in the Nifty Bank.  The stock hit a 52-week high of ₹1,020.35 on October 23, 2025.

 

HDFC Bank CEO Jagdishan not seeking reappointment, to retire in October

 

HDFC Bank's MD & CEO Sashidhar Jagdishan has decided not to seek reappointment as the bank’s MD & CEO and will retire from the bank on October 26, 2026, the bank said in a BSE filing on Saturday.

 

Jagdishan conveyed his decision to the bank on August 29, according to HDFC Bank’s stock exchange disclosure. The bank’s board took note of his decision at a meeting held the same day. The HDFC Bank board said it would fast-track the process of selecting and appointing Jagdishan’s successor. CHECK Stock Market LIVE Updates 

Brokerages view on HDFC Bank

 

HDFC Bank is a leading private sector bank with consistent growth and operational performance over various cycles. Following the merger, HDFC Bank has one of the largest home loan portfolios in the country. 

 

Sashi Jagdishan has decided not to seek an extension beyond October 26, 2026. This follows months of uncertainty starting with the exit of former chairman, Atanu Chakraborty, followed by the departure of Sampath Kumar and other issues like marketing of Credit Suisse AT-1 bonds, MSRDC deposit, the ensuing US class-action lawsuit, and mis-selling of Carlisle's Luxembourg Life Fund through its Dubai operations in 2019. Interestingly, most of these happened before Sashi was appointed as CEO. Board has initiated a process to find candidates for this role internally and externally, analysts at Jefferies said in report.

 

The brokerage firm said it will watch out if this leads to follow-on exits among senior leaders of the bank. This can impact business and performance in the near term. Uncertainty can drag earnings per share (EPS) & valuations, but after a 27 per cent fall YTD at 1.5x PB, the risk-reward is balanced, analysts at Jefferies said. The brokerage firm has trimmed its price target to ₹880 from ₹1,050, while maintaining a 'Buy' call on the stock.

 

“Transition is likely to impact revenue momentum on deposit mobilisation and fees. So, we trim earnings for FY27-29 by 3 per cent each. We don't see risk to asset quality as the bank has sustained high quality; even the book value of exposure to Essel group was NIL at merger; the claim includes principal/interest. Uncertainty can lift the cost of equity, leading to lower valuation,” Jefferies said.

 

According to ICICI Securities, current MD & CEO decision at the end of the tenure remains a surprise, though not completely unexpected. Ambiguity on leadership succession still persists and could keep valuation in a range. Appointment of a credible candidate could provide much needed clarity and help remove the leadership overhang. Deputy MD Kaizad Bharucha, executive overseeing key retail and wholesale businesses, has emerged as a leading internal candidate, while the bank is also reportedly evaluating an external candidate. 

 

Near-term volatility cannot be ruled out, though sustained re-rating will depend on a smooth and timely succession, the brokerage firm said in a note.

 

The changes in its leadership team will help to address the skepticism that has engulfed the bank over the recent period. A new leadership team, alongside an improvement in growth and earnings trajectory, should improve investor sentiment, analysts at Motilal Oswal Financial Services. The brokerage firm estimates HDFC Bank to deliver an improved earnings performance from FY28 onward, while return on asset (RoA) should sustain at 1.8 per cent. Analysts revised the target price to ₹925 (1.8x FY28E ABV + ₹128 for subs) and maintained a 'BUY' rating on HDFC Bank. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.