HDFC Bank shares fall to 52-week low following CEO Sashidhar Jagdishan exit

HDFC Bank shares fell to a 52-week low of ₹704.15 on Monday after chief executive Sashidhar Jagdishan announced he will not seek re-appointment when his term expires on October 26, 2026. The stock initially rose 2.5 percent at the open before reversing to trade as much as 5 percent below its intraday high.

The sudden departure leaves the private lender with an unusually narrow window to secure regulatory approval for a successor. Typically, banks initiate the search for a new chief executive roughly six months before an incumbent's term concludes.

This leadership vacuum compounds existing governance concerns following the March resignation of former part-time chairman Atanu Chakraborty, who cited ethical disagreements with certain bank practices. The board is now evaluating internal and external candidates to satisfy Reserve Bank of India requirements for multiple nominees.

Internal contenders for the role reportedly include Deputy Managing Director Bharucha, who brings nearly 35 years of banking experience, and V. Srinivasa Rangan. Jagdishan, who joined the lender in 1996, is credited by the board with steering the institution through one of India's largest corporate mergers.

His decision to step down comes despite direct efforts by the board to persuade him to extend his nearly three-decade tenure. The chief executive's exit accelerates a broader sell-off in the stock, which has declined 28.47 percent year-to-date and 25 percent over the past year.

The shares have also failed to deliver positive returns over three-year and five-year horizons, falling more than 10 percent across both periods. Motilal Oswal maintained a buy rating but revised its target price to ₹925, suggesting the leadership transition could ultimately ease market skepticism.

The brokerage projects a return on assets of 1.8 percent and stronger earnings growth beginning in fiscal 2028, valuing the stock at 1.8 times its adjusted book value plus ₹128 for subsidiaries. Mahesh M Ojha, vice president of research at Kantilal Chhaganlal Securities, described the current valuation as an attractive entry point for long-term investors.

He advised accumulating shares gradually, citing the bank's underlying fundamentals and growth prospects despite the recent equity depreciation. Such strategic positioning assumes the incoming management team will successfully navigate the regulatory transition and restore market confidence.