Macquarie’s note comes at a time when uncertainty over the bank’s CEO succession remains a key overhang for the stock. HDFC Bank CEO Sashi Jagdishan’s current tenure ends on October 26, 2026, leaving just about two months for the bank to finalise the next course of action.
The brokerage said markets have been concerned about the succession issue for some time, contributing to the stock’s recent weakness.
What happens next?
Macquarie expects the bank’s Nomination and Remuneration Committee (NRC) to first evaluate and select a candidate before recommending the name to the board. The board, chaired by Rajiv Kumar, would then approve the candidate and recommend the appointment to the Reserve Bank of India (RBI) for its final decision.
The brokerage said that the RBI has recently been taking around 30-45 days to approve CEO appointments after receiving recommendations from bank boards.
Against this backdrop, Macquarie said there are two possible outcomes for Jagdishan’s tenure, with both currently appearing equally probable.
Option 1: Six-month extension
A short extension could indicate that the board is looking beyond Jagdishan and needs additional time to identify and recommend a new CEO candidate to the RBI.
Macquarie believes such an outcome would prolong the uncertainty around the leadership transition. A new CEO could also take time to settle into the role, potentially putting further pressure on HDFC Bank’s stock.
Option 2: Full three-year extension
A three-year renewal for Jagdishan, on the other hand, would remove the immediate uncertainty around the bank’s leadership.
Macquarie believes the stock could find support around current levels in this scenario, with its future performance then likely to be driven more by an improvement in the bank’s fundamentals.
The brokerage said both outcomes are equally likely at this stage, while flagging a temporary extension of Jagdishan’s tenure and further sharp compression in margins as key risks.
Meanwhile, Puneet Sharma, who has been designated as HDFC Bank’s new CFO, is scheduled to join the bank on September 1, 2026.
Speaking to CNBC-TV18, Rana Gupta, Senior Portfolio Manager, India Equity Specialist at Manulife Investment Management, said that the firm likes financials. However, he cited uncertainty around HDFC Bank’s leadership as a key concern for investors, with just two months left before CEO Sashidhar Jagdishan’s tenure ends and no clarity yet on the way forward.
“For any bank where the management in charge is not known, that is a very difficult situation for investors. There are just two months left, and we do not know the direction. So, I think it is a challenge for investors. There are no two ways about it,” Gupta said.
HDFC Bank shares ended 1.75% lower at ₹712 on Thursday. The stock is down nearly 30% so far this year.
