HDFC Bank shares: Jefferies sees 64% upside, says stock trades at 10-20% discount to ICICI, Axis & KMB

Jefferies in its latest note said HDCF Bank is its top banking sector pick, adding that valuations have turned attractive post the recent correction. The foreign brokerage said HDFC Bank shares have fallen 24 per cent year-to-date, outperforming peers, due to concerns around exit of Chairman & impact of West Asia conflict. 

It said HDFC Bank valuations now at 1.6 times estimated FY27 adjusted book value are at 20 per cent discount to ICICI Bank Ltd and 10-20 per cent discount to Axis Bank Ltd and Kotak Mahindra Bank Ltd.

On a price to earnings basis, HDFC Bank trades in line with ICICI Bank Ltd and 10-15 per cent premium over Axis Bank and Kotak Mahindra Bank. 

"Valuations are attractive given stronger asset quality, healthy growth & ROE. Sensitivity to higher credit cost credit cost & lower topline is manageable. Clarity on board-issues & rollover of CEO-term/ Chairman appointment can aid rerating. It is among our sector top-picks," Jefferies said.

Jefferies suggested a target price of Rs 1,240 on HDFC Bank, which hints at 64 per cent potential upside for the banking stock. The commentary comes days after Jefferies replaced HDFC Bank with HSBC in its portfolio. On March 26, in its GREED & fear note it said an investment in HSBC will be introduced with a 4 per cent weight in Asia ex-Japan long only portfolio. 

Jefferies cut weightages of India and Australia by two percentage points each, as it increased the weightage of Taiwan by four percentage points.  

HDFC Bank's part-time Chairman and Independent Director Atanu Chakraborty recently resigned, citing “certain happenings and practices within the bank that I have observed over the last two years are not in congruence with my personal values and ethics.” The HDFC Bank management later clarified that Chakraborty's resignation was not due to any regulatory issues and that there was no material matter or specific issues seen regarding bank operations. 

Keki Mistry replaced Atanu Chakraborty and assumed the role with effect from March 19, 2026, for three months. 

"To reinforce the robust governance standards of the Bank, the Board of Directors of the Bank at its meeting held on March 23, 2026, took a proactive step and approved the appointment of external law firms(domestic and international), to conduct review regarding Mr. Chakraborty’s resignation letter. The said law firms have been advised to provide their report on the same within a reasonable period of time," HDFC Bank said on March 24.