Macquarie removes HDFC Bank from marquee buy list; maintains 'outperform' — here's why

Global brokerage Macquarie on Thursday said it has removed HDFC Bank Ltd from its marquee buy list following the resignation of the private lender's part-time Chairman and Independent Director Atanu Chakraborty.

"HDFC Bank management hosted a call now to discuss the resignation of Chairman. The call was represented by the new interim part-time Chairman Keki Mistry, MD & CEO Sashi Jagdishan and Dr. Sunita Maheshwari (independent director), Lily Vadera (independent director), Harsh Bhanwala (independent director), Renu Karnad (non independent, non executive director)," the brokerage stated.

Highlighting key takeaways from the call, Macquarie said, "The board is not aware as to why the Chairman resigned. In fact, they repeatedly asked him and he didn't give any specific reasons. The new Chairman Keki Mistry also said that there could be some relationship issue between Atanu (ex-chairman) and the management which we interpret as a possible power struggle."

It added, "Keki clarified that there are no material matters, no specific instances and no operational issues. The NRC committee will take a call on Sashi's re-appointment as the CEO which is coming up for renewal in October 2026."

The brokerage also said, "The regulators have been regularly doing onsite and offsite inspections and comfortable with the bank. The approval for the new Chairman was given within a short notice. Compliance and governance and controls remains very strong."

It further stated, "Sashi also clarified there is no relationship issue with the current DMD Kaizad and they both are well aligned with the overall objectives and clarified the DMD's strong commitment towards the organisation."

Explaining the rationale behind removing the stock from its marquee list, Macquarie said near-term underperformance may persist. "While fundamentals remain strong with good ROA, at this point in time governance concerns will weigh down heavily on the stock. Investors would want more comfort from the board. Also now the uncertainty surrounding Sashi's reappointment will weigh down on the stock. Key risks include slowdown in growth and further governance issues cropping up," it stated.

That said, the global brokerage has maintained its 'outperform' rating on the stock, with a 12-month target price of Rs 1,200.