ICICI Securities Recommends HDFC Bank for Investment, Targets Rs 1120

HDFC Bank Research Report

Summary

We have revised our analysis following the resignation of Mr. Atanu Chakraborty, part-time chairman of HDFC Bank. The bank's management has assured investors that there have been no regulatory lapses and denied any power struggle among the Board or executives.

Key Developments

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The resignation of Mr. Atanu Chakraborty citing personal values and ethics inconsistency has raised concerns among investors. The bank's management has stated that the outgoing chairman did not disclose any specifics, and the issue appears to be more interpersonal in nature.

RBI Statement and Outlook

The Reserve Bank of India (RBI) has issued a statement assuring investors on the matter. We believe the cohesiveness of the Board and management is critical, and the bank's management has demonstrated conservative risk practices.

Recommendation

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We maintain a BUY rating on HDFC Bank with an unchanged target price of INR 1,120, valuing the stock at approximately 2.2x FY28E core banking book. Risks include any sudden churn in Board/senior personnel and slower-than-expected deposit mobilization.