Following Atanu Chakraborty’s departure, Macquarie removes HDFC Bank from its marquee buy list, although it keeps its “outperform” rating and Rs 1,200 target.
Following Atanu Chakraborty’s abrupt resignation as part-time chairman, HDFC Bank was taken from Macquarie’s flagship buy list due to ongoing market pressure.
The HDFC Bank stock may continue to underperform in the foreseeable future, according to Macquarie’s most recent analysis. Additionally, the stock may be negatively impacted by governance issues even though the fundamentals are still solid and the return on assets is high.
In light of this, Macquarie desires greater assurance at the board level, particularly in light of the uncertainty surrounding MD & CEO Sashi Jagdishan’s reappointment, despite the lender’s aggressive efforts to resolve it.
As a result, Macquarie has taken HDFC Bank off the flagship buy list, citing a slowdown in growth and the emergence of more governance problems as two of the largest concerns.
This follows intense trading pressure on HDFC Bank’s stock on Thursday, when shares saw falls of about 4%. This occurs in spite of the fact that HDFC Bank’s management confirmed earlier in the day during a conference call that there isn’t a significant issue with the lender’s book.
Keki Mistry, the recently appointed interim part-time chairman, has explained that HDFC Bank’s financial situation is still strong and that authorities have been inspecting the bank both online and offline and are satisfied with the lender.
However, Macquarie continues to have an outperform rating for HDFC Bank and is generally positive about the company. The company’s target price of Rs 1,200 indicates that the stock might rise by almost 43% from its current levels.
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