HDFC Bank shares rise after falling 18% in March - Buy, sell or hold?

After falling 18 per cent in March, HDFC Bank Ltd started April on a positive note, rising nearly 2 per cent in Wednesday’s trade as a couple of brokerages maintained faith following Atanu Chakraborty’s resignation as part-time chairman of the private lender. The stock rose 1.77 per cent to trade at Rs 744.50 apiece on Wednesday, off its October 2025 high of Rs 1,020.35.   

Chakraborty, in a recent interview with a media house, said the primary reason for his resignation was “incongruence” with personal values and ethics. Systematix Shares and Stocks, which noted takeaways from the interview, said he also highlighted other issues, including a lack of shareholder value creation, while clarifying that the move was not due to personal differences and that such speculations were overblown.

The RBI had raised concerns regarding the Dubai branch in 2023, and the board was aware of the issue. It has since been addressed, with several senior executives penalised, though it should not have occurred in the first place, Systematix cited Chakraborty as saying in the CNBC-TV18 interview.

"Mr Chakraborty spoke in a very calibrated manner during the interview and did not clearly specify the events that led to his resignation. The interview does not materially change our earlier assumption that there are no material governance issues at HDFC Bank. It also does not provide clarity on whether there are any operational issues in the bank," Systematix's analyst Siddharth Rajpurohit said in a note.

HDFC Bank shares hit a 52-week low of Rs 727 on March 30.     

Chakraborty described HDFC Bank as a sound institution and emphasised that it has a very capable middle management. He expressed concern over any ambiguity in values and ethics, stating that the board needs to introspect on the ethical standards and governance issues he had raised.

JPMorgan this week upgraded HDFC bank to 'overweight' from 'neutral' with a target price of Rs 1,010, citing attractive risk reward. Jefferies said HDFC Bank is its top banking sector pick, adding that valuations have turned attractive post the recent correction. This 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 Ltd valuations, at 1.6 times estimated FY27 adjusted book value, were at a 20 per cent discount to ICICI Bank Ltd and a 10-20 per cent discount to Axis Bank Ltd and Kotak Mahindra Bank Ltd.

On a price-to-earnings basis, HDFC Bank traded in line with ICICI Bank and at a 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 & lower topline is manageable. Clarity on board issues and rollover of CEO term or Chairman appointment can aid rerating. It is among our sector top picks," Jefferies said.

Jefferies this week suggested a target price of Rs 1,240 on HDFC Bank. The commentary came 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 would be introduced with a 4 per cent weight in its Asia ex-Japan long-only portfolio.