HDFC Bank, India’s largest private lender, has submitted the names of two candidates to the RBI for the CEO role, formally beginning the succession process for Sashidhar Jagdishan, who is due to retire later this year. HDFC Bank shares rose 3% to Rs 727 on Tuesday.

While the lender has not named the two candidates, people familiar with the matter told The Economic Times that the bank's deputy managing director Kaizad Bharucha and an external candidate are on the list. ICICI Prudential Life CEO Anup Bagchi and Citi India CEO K Balasubramanian are among those being considered for the external candidate slot.

Last month, Managing Director and CEO Sashidhar Jagdishan decided not to seek another term at the helm of the country's largest private lender. Jagdishan's current tenure ends on October 26, 2026.

Also read: HDFC CEO race: One insider, one outsider in contention for the top job

The bank said in an exchange filing over the weekend that its board had tried to persuade Jagdishan to continue, but he remained firm on his decision not to seek re-appointment. The development comes amid concerns over governance that began in March this year after its former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank did not match his personal values and ethics.

What are brokerages saying?

Jefferies has retained a Buy rating and a target price of Rs 880 (24% upside) and believes a smooth leadership transition at HDFC Bank would benefit both the lender and the broader banking sector. The brokerage said the board move came at the right time and that confirming the new appointment before Jagdishan’s term ends on October 26, 2026, could ease investor concerns and reduce uncertainty's impact on business momentum.

HDFC Bank is currently trading at 1.5x FY27E adjusted price-to-book value, around 30% below ICICI Bank’s valuation, 15% below Kotak, at par with Axis Bank and around 15% above SBI. Jefferies noted that weakness in HDFC Bank has also weighed on the performance of other banks. It believes greater clarity on the leadership transition, along with improved business momentum, could support a broader re-rating.

Jefferies said its conversations with investors indicate they are comfortable with a change in leadership but believe former leaders from PSU banks should not be considered as they could complicate the transition.

The brokerage sees Kaizad Bharucha, DMD overseeing corporate, business banking and retail assets, among other areas, as a key internal candidate. Bharucha was appointed Executive Director in June 2014 and could have a tenure of 2.8-3 years in the role. Jefferies said the bank could consider having Bharucha lead the lender while preparing for a smoother transition over the longer term.

Nomura sees strong upside in HDFC Bank shares

With a Buy rating and a target price of Rs 950 (34% upside), Nomura believes a possible internal appointment of Kaizad Bharucha could provide initial relief by ensuring continuity and limiting disruption at HDFC Bank. His familiarity with the bank and its businesses could also facilitate a smoother transition, the brokerage said. However, it noted that a credible external candidate could provide a longer runway and a cleaner slate.

Nomura says an external appointment could have greater significance for the stock over the medium term, as a new leader would have more scope to reassess strategy, challenge existing practices and drive a strategic reset. With HDFC Bank having materially underperformed, the brokerage said a credible external candidate with a strong operating track record could act as a catalyst for a re-rating, particularly if accompanied by a clear roadmap for growth, deposits, margins and returns.

Read more: HDFC Bank shares hit 52-week lows over consecutive sessions while analysts scream Buy

Bernstein, Macquarie sees over 60% upside in HDFC Bank stock

With a price target of Rs 1,150, Bernstein retains its Outperform rating on HDFC Bank. The brokerage noted that HDFC Bank’s board has proposed elevating Jimmy Tata to the position of whole-time director and increasing the total number of board seats to four, according to ET Now.

Bernstein added that the leadership succession timeline remains on track ahead of the current CEO’s retirement.

Macquarie maintained its Outperform rating on HDFC Bank with a target price of Rs 1,150 per share, implying more than 62% upside from the stock’s previous closing price. The brokerage said the appointment of an external CEO is being viewed as the key catalyst for a re-rating of HDFC Bank’s stock.

Who will become the new HDFC Bank CEO?

Jefferies said potential external candidates could include Anup Bagchi, currently CEO of ICICI Pru Life and previously an Executive Director at ICICI Bank overseeing retail banking; Paresh Sukthankar, who was earlier DMD at the bank before exiting in 2018; Vibha Padalkar, CEO of HDFC Life; Aseem Dhru, former HDFC banker and former CEO of SBFC; Rajiv Sabharwal, currently CEO of Tata Capital; and Amitabh Chaudhry, CEO of Axis Bank.

The brokerage said its conversations with investors suggest they are comfortable with a change in leadership, but believe the appointment of former leaders from PSU banks should be avoided as it could complicate the transition.

HDFC Bank share price performance

Stock market heavyweight HDFC Bank shares have been hitting fresh 52-week lows for several consecutive sessions, even as analysts continue to maintain their Buy ratings after the stock has fallen around 29% so far in 2026.

India’s largest private sector lender slipped to a fresh 52-week low of Rs 681.90 apiece on Friday, taking the decline to more than 33% from its record high of Rs 1,020.50 apiece touched in October last year.

HDFC Bank has been the worst-performing constituent of the Nifty Bank index this year. The weakness has not been limited to the current year, with the lender’s shares also delivering poor returns over the past three and five years, declining nearly 14% and 9%, respectively.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.