India's HDFC Bank gains on CEO recommendations, Street divided on successor choice (updated)

HDFC Bank

15/09/2026 05:04

Rewrites throughout
By Surbhi Misra and Gopika Gopakumar
Sept 15 (Reuters) - HDFC Bank HDBK.NS rose as much as 3.2% on Tuesday, in the biggest percentage gain in over four months, after India's largest private lender moved ahead with its CEO succession process, submitting two names to the central bank.
HDFC Bank shared the update on Saturday without disclosing the candidates, as it looks to replace CEO Sashidhar Jagdishan, who will step down when his term ends in late October.
Reuters reported last month that HDFC Bank Deputy Managing Director Kaizad Bharucha was likely to be one of the two candidates, with the bank also considering an external candidate. CNBC-TV18 reported on Sunday, citing sources familiar with the matter, that ICICI Prudential Life Insurance CEO Anup Bagchi was the external name being considered. 
HDFC Bank did not immediately respond to a Reuters' request for comment. Bagchi and Bharucha did not immediately respond to requests for comment.
CEO succession has been a key investor concern for HDFC Bank since Jagdishan announced on August 29 that he would step down. Brokerages say that clarity on leadership would abate investor worries, facilitating a stock re-rating. 
HDFC Bank shares, which were about 40% ⁠foreign-owned at June-end, have fallen 27.2% this year. The decline accelerated after former chairman Atanu Chakraborty left, citing governance concerns, though a subsequent external review found no evidence substantiating the issues raised.

INSIDER OR OUTSIDER?
Jefferies analysts said Bharucha would be a simpler choice for the bank, given his experience in leading the corporate, business banking and retail asset businesses. They say this could prepare the bank for a smoother transition for the longer-term.
The brokerage report added that investors will be wary if any former state-owned bank executive is appointed to the post  and maintained its "buy" rating with an 880-rupee price target.
Analysts at Nomura took the view that an internal appointment could ensure continuity and limit disruption, while a strong external candidate could offer a strategic reset and support a sustained re-rating, particularly with a clear roadmap on growth, deposits, margins and returns. 
The brokerage maintained its "buy" rating and 950-rupee price target.
Macquarie Research on the other hand, suggests an external candidate for the MD & CEO would bring a fresh perspective and clean mandate, resulting in a re-rating of the stock.
HDFC Bank shares were up 1.84% at 721.15 rupees apiece as of 11:59 am IST.

 (Reporting by Surbhi Misra and Gopika Gopakumar; Editing by Ronojoy Mazumdar)
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