Motilal Oswal has maintained its 'Buy' rating on HDFC Bank with a price target of ₹925, citing a potential earnings recovery by fiscal year 2028. The brokerage report comes as the lender navigates a major leadership transition, including the upcoming retirement of its CEO and key management changes.
Motilal Oswal has maintained its 'Buy' rating on HDFC Bank, setting a target price of ₹925 for the stock. This assessment comes as the country's largest private sector lender undergoes a significant leadership transition, a period that the brokerage believes could be a turning point for investor sentiment.
The bank is currently managing a major change in its top management. MD and CEO Sashidhar Jagdishan has confirmed he will not seek reappointment, with his tenure set to conclude on October 26, 2026. This transition is happening alongside other key personnel shifts, including the retirement of CFO Srinivasan Vaidyanathan in November 2026 and the transition of the Chairman role to Rajiv Kumar following the exit of Atanu Chakraborty. To ensure continuity, Puneet Sharma has been designated as the incoming CFO, effective September 1, 2026.
Despite the management flux, the brokerage remains optimistic about the bank's long-term financial path. The ₹925 target is derived from a valuation of 1.8 times the bank's estimated adjusted book value for fiscal year 2028, with an additional ₹128 per share value attributed to its various subsidiaries. Analysts at Motilal Oswal project an improvement in earnings starting in fiscal year 2028, with the Return on Assets expected to stabilize around 1.8%.
The bank’s stock has faced significant pressure, correcting by 18% over the past six months as markets reacted to the leadership uncertainty and broader banking sector challenges. For investors, this correction is viewed by the brokerage as a potential entry point, provided the bank can execute its transition plans without disrupting operations.
However, the path ahead contains specific operational challenges. The bank continues to face hurdles regarding deposit mobilization, which remains a critical focus area in a competitive banking environment. Furthermore, the ongoing post-merger integration requires careful execution to protect profit margins and maintain asset quality. Investors will need to monitor how the new leadership team addresses these integration issues and whether the bank can successfully ramp up its deposit growth to support lending activities in the coming quarters. The next significant indicator for shareholders will be the management’s ability to maintain earnings stability throughout this transition period.