Uncertainty ends at HDFC Bank, Shashidhar Jagadeeshan Hard Task Master & Investor Selection: Brokerages

Uncertainty ends at HDFC Bank, Shashidhar Jagadeeshan Hard Task Master & Investor Selection: Brokerages

With the appointment of Shashidhar Jagadeesan as the Managing Director & Chief Executive Officer (CEO) of HDFC Bank, the legacy uncertainty over the CEO has continued for the past few weeks, as global brokerages expect.

Aditya Puri, the current MD of the country’s largest private sector lender, had earlier hinted that the next MD & CEO would be the only internal candidate.

That came true on August 3 when the Reserve Bank of India approved the appointment of Shashidhar Jagadeesh as the Bank’s Managing Director & CEO for a three-year term. W.e.f. October 27, 2020.

Aditya Puri will retire as the bank’s managing director on October 26.

” CEO succession uncertainty finally ended. This is positive for the bank. Sashi has been closely connected with internal/board & external stakeholders. His appointment should make the transition at the bank smoother,” said Citi. It has a buy rating on the stock with a target of Rs 1,350 per share. It indicating a 30 percent probability from current levels.

Sashidhar Jagdishan is working in HDFC from 1996. as he appointed as manager in the Finance function.

Sashi is currently Group Head of Finance, Human Resources, Legal & Secretarial, Administration, Infrastructure, Corporate Communications, Corporate Social Responsibility & Bank Strategic Change Agent.

Sashidhar Jagdishan

“Sashi Jagdishan is the right choice and a big positive. He ensures continuity. He is ‘hard taskmaster & investors’ choice too,” said Macquarie. Continuing the per-form call on the stock with a target of Rs 1,114 per share, it indicates a 7 percent potential upside.

HDFC Bank’s stock price has been under pressure due to concerns around the succession and the recent attrition in the top management. The stake sale by Aditya Puri had also impacted the sentiment and raised uncertainty over the CEO finalization. The stock had corrected 12 percent in two weeks before the finalization of CEO by RBI

“Although some concerns remain around top-level attrition, the RBI’s approval addresses a major overhang on the stock’s performance as Mr. Jagdishan has been with the bank for the past several years. Thus succession by an internal candidate augurs well to boost investor confidence. To continue the impeccable performance the bank has witnessed under the leadership of Mr. Puri,” said Motilal Oswal.

The system is challenged by the impact of the COVID-19 outbreak. The brokerage believes the big banks are in a better position to overcome this crisis. It remained positive on HDFC Bank and continued its buying call with a target of Rs 2,280, indicating a 23 percent potential upside.

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