Jefferies cuts HDFC Bank price target, retains Buy after CEO exit. Here’s why
Jefferies retained its Buy rating on HDFC Bank but cut the target price to Rs 880 from Rs 1,050 following CEO Sashidhar Jagdishan’s decision not to seek reappointment. The brokerage flagged near-term risks to deposit mobilisation and fee income but said valuations remain undemanding.
Jefferies, a major Wall Street firm, has reduced the price target for HDFC Bank shares from Rs 1,050 to Rs 880, maintaining a Buy rating following the announcement that CEO Sashidhar Jagdishan will not seek a term extension. Analysts predict a 22% upside from current levels. The company is watching the situation closely, as potential senior leader exits could impact business performance in the near term.
Jefferies suggests that appointing former PSU bank leaders may complicate the transition. However, they identify Kaizad Bharucha, the Deputy Managing Director leading various departments, as a potential internal candidate for the CEO role. Other possible candidates include external executives from ICICI Prudential Life, ICICI Bank, HDFC Life, Tata Capital, and Axis Bank.
Analysts have lowered their FY27-29 earnings estimates by 3% each, citing no risk to asset quality and a nil exposure to the Essel group during the merger. The revised target is based on 1.6x September 2028 adjusted price-to-book value, considering the stock's current trading at 1.5x one-year forward price-to-book and 12x PE ratios.
HDFC Bank's board accelerated the successor identification process after Jagdishan decided not to extend his term.
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Also reported by 1 other outlet
- HDFC CEO's pushback on overhaul fueled exit economictimes.indiatimes.com
