- Target
- ₹920
- At report
- ₹720+28% printed
- Vs our close
- +27.3%
ICICI Securities maintains BUY on HDFC Bank but cuts its TP to INR920 (from INR1,020) after MD&CEO Sashidhar Jagdishan informed the board he will not seek re-appointment at the end of his term on 26-Oct-26. The broker sees no easy succession path given the DMD's limited residual tenure under RBI norms and the other ED's limited banking experience, and expects the new leadership may prioritise fixing balance-sheet structure (CASA, cost of funds) over near-term growth.
- Mr. Jagdishan will not seek term renewal at the end of his tenure on 26-Oct-26; the board has not named an interim candidate but has assured a timely appointment
- No easy succession choice: DMD Mr. Kaizad has residual tenure of less than 3 years under RBI norms, and ED Mr. Rangan has limited commercial banking track record; an external hire could bring cultural integration and management-churn risk
- ICICI Securities cuts its target multiple to ~1.8x (from ~2x) FY28E ABV to reflect succession uncertainty, deriving a TP of INR920 (vs INR1,020 earlier)
- Estimates an unchanged 13-14% loan CAGR (below systemic growth) and ~14% RoE for FY26-28E
- HDFCB has become a laggard in FCNR(B) deposit mobilisation (2.4% market share vs SBI's 25.7% and Kotak's 22.1%) and has seen CASA share and cost of funds diverge unfavourably from peers post-merger
- Stock has underperformed the banking index by ~40% over the last ~3 years, suggesting much of the weakness is already priced in; re-rating contingent on the extent of course correction by the new MD&CEO
- Hiccups in MD&CEO succession process
- Further churn in senior management
| Broker estimates | Unit | FY25A | FY26A | FY27E | FY28E |
|---|---|---|---|---|---|
| NII | INR bn | 1,226.7 | 1,286.9 | 1,442 | 1,696.8 |
| Op. profit | INR bn | 1,001.3 | 1,185.6 | 1,230.3 | 1,462 |
| Net Profit | INR bn | 673.5 | 746.7 | 839 | 980 |
| EPS | INR | 44.2 | 48.6 | 54.5 | 63.7 |
| ABV | INR | 322.1 | 360.2 | 402.1 | 451.2 |
| P/BV | x | 2.2 | 2 | 1.8 | 1.6 |
| P/ABV | x | 1.9 | 1.7 | 1.5 | 1.3 |
| Return on Assets | % | 1.8 | 1.8 | 1.8 | 1.9 |
| Return on Equity | % | 14.1 | 13.8 | 13.9 | 14.5 |
Valuation: SoTP. SoTP-based TP of INR920: core banking book at ~1.8x FY28E ABV (INR798/share) plus subsidiaries/associates (HDFC Life, HDFC Mutual Fund, HDB Financial Services, HDFC Securities, others) valued at INR153/share after a 20% holding-company discount. The Earnings Revisions table shows 0% change to FY27E/FY28E EPS; the TP cut to INR920 from INR1,020 reflects a lower target multiple (~1.8x vs ~2x FY28E ABV) for MD&CEO succession uncertainty, not a change in earnings estimates.
Extraction note: This is a governance/company-update note (MD&CEO succession), not a quarterly results note, so quarter is null. CMP/price date not separately labelled; used the report date (31 August 2026) as both.