HDFC Bank shares rise 3% as lender shortlists CEO candidates. Why Bernstein, Nomura, others see up to 62% upside

HDFC Bank's shares surged 3% to hit a day high of Rs 727 on the NSE after the bank submitted two names for the CEO position to the Reserve Bank of India (RBI). This marks the beginning of the succession process for Sashidhar Jagdishan, who is set to retire later this year. The two internal candidates reportedly shortlisted are deputy managing director Kaizad Bharucha and an external candidate, among whom ICICI Prudential Life CEO Anup Bagchi and Citi India CEO K Balasubramanian are the frontrunners.

The succession process comes after a governance cloud surfaced in March due to former part-time chairman Atanu Chakraborty's resignation over unethical practices. The cloud led to a significant share price decline, which has since recovered with leadership changes. Brokerages like Nomura and Bernstein maintain positive outlooks on HDFC Bank, with Nomura estimating a potential 62% upside and Bernstein targeting a price of Rs 1,150, implying more than 62% upside potential.

Macquarie also maintains an 'Outperform' rating with a target price of Rs 1,150, citing an external CEO appointment as the primary catalyst for a stock re-rating.