HDFC Bank stock plunges after chairman’s sudden exit; Jefferies sees 47% upside—track updates and analyst views now.
HDFC Bank: Jefferies sees 47% upside – Is the ‘Sleeping Giant’ finally a ‘Buy’? (Photo source: Canva)
It started with a resignation letter on Wednesday (March 18) evening, but by Thursday morning (March 19), it resulted in HDFC Bank, India’s largest private lender, being at the center of a storm.
The stock plunged as much as 8% to Rs 772, hitting a 52-week low. But what triggered this sharp fall, and is the sell-off justified?
Let’s take a look –
Jefferies on HDFC Bank: ‘Buy’, sees 47% upside potential
The answer, surprisingly, was a sudden leadership shake-up. Atanu Chakraborty, HDFC Bank’s part-time Chairman, resigned with immediate effect, citing that “certain aspects at the bank didn’t align with his values.”
The market reacted sharply. In today’s trading, the share price of the private lender traded in a bear territory and ended in red.Yet, amid the panic, Jefferies, the global brokerage house, saw opportunity. According to the brokerage report, HDFC Bank remains fundamentally strong.
Jefferies has maintained a ‘Buy’ rating and set a target price of Rs 1,240. This suggests an upside of 47% from current levels.
“In a surprise move, HDFC Bank’s Chairman resigned with immediate effect. While clarity on issues is needed, we are relieved that Keki Mistry is appointed as interim Chairman for three months & we hope he can be appointed as permanent Chairman in due course given his association with group and credibility on corporate governance & regulatory aspects,” the report said.
Jefferies on HDFC Bank: Key metrics
Jefferies also highlighted that the bank’s profits are projected to grow from Rs 74,900 crore in FY26 to Rs 92,200 crore by FY28. Earnings per share are expected to increase from Rs 49 to Rs 60 in the same period.
According to the Jefferies report, HDFC Bank’s return on assets is expected to remain around 1.7-1.8%, and return on equity near 14%, even as the price-to-earnings ratio dips from 15 in FY26 to 12 in FY28.
HDFC Bank: A sudden jolt for investors
Investors were rattled after the sudden resignation of HDFC Bank’s part-time Chairman, Atanu Chakraborty, late Wednesday. His term was supposed to run until May 2027, but he stepped down immediately, citing that “certain aspects at the bank didn’t align with his values.”
The announcement sparked panic, leading to an intraday fall of as much as 8% in the stock price.
However, clarity came quickly. The Reserve Bank of India reassured the market that there were no material concerns about the bank. Keki Mistry, stepping in as interim Chairman, emphasised that “there is no power tussle at the bank.”
HDFC Bank share price performance
The share price of HDFC Bank is down 2% in the last five days, 12% in a month, 17% in six months, and 8% in a year. Year-to-date, the stock has tumbled 19%. The share price of HDFC Bank ended 5.11% down on March 19.
Antu Eapen Thomas, Research Analyst, Geojit Investments, highlighted that, “Recent developments, including the part-time Chairman’s resignation and sustained FII selling, have led to a valuation correction, with the stock now trading at discount to its long-term averages and is relatively attractive compared to peers. The appointment of incoming part-time Chairman Keki Mistry serves as a reassuring indication that the situation is being addressed with its merit. The bank’s fundamentals remain strong, supported by superior asset quality, disciplined provisioning, and best‑in‑class operating efficiency, as reflected in a healthy cost‑to‑income ratio. However, the elevated loan‑to‑deposit ratio and post‑merger NIM compression temper near‑term optimism, prompting a cautious, wait‑and‑watch approach as we monitor improvement in these metrics over the coming quarters.”
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.
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