Brokerages bullish on HDFC Bank after RBI gives nod to new CEO

Mumbai: Brokerages have given a thumbs up to HDFC Bank after the Reserve Bank of India approved appointment of Sashidhar Jagdishan as the new Managing Director and Chief Executive Officer of HDFC Bank. Analysts believe that the selection of an internal candidate who has been with the bank for over two decades, ensures continuity and smooth transition as he is in sync with outgoing CEO Aditya Puri, board of the bank and external stakeholders. Here's what brokerages are saying about this development:

ICICI Securities
Rating: Maintained 'buy'
Target Price: Rs 1,470

• New appointment is on expected lines
• Jagdishan was strategically positioned as the preferred choice and this is what street was factoring in.
• His appointment would lend certainty to the stability of business as usual.

Macquarie
Rating: Maintained outperform
Target Price: Rs 1,114

• In an uncertain environment like this, an internal candidate who is in sync with the outgoing CEO Aditya Puri is the right choice
• New CEO comes with diverse experience, having handle multiple functions at the bank
• New CEO is a hard task master and investors' choice too

Kotak Institutional Equities
Rating: Maintained 'add'
Target Price: Rs 1,200

• Appointment of the new CEO removes one key overhang on the stock.
• This would likely result in a business as usual scenario for the medium term
• Valuations are attractive for a dependable franchise and strong execution on the ground.

Jefferies
Rating: Maintained 'buy'
Target Price: Rs 1,350

• See new CEO approval by RBI positively as he has been with the bank for 24 plus years and has handled critical roles.
• The new CEO has been closely connected with internal teams/board and external stakeholders, which should ensure smooth transition.
• Jagdishan's appointment has been cleared for three years but he should have a 15year career ahead of himuntil he turns 70and this should offer continuity as well.