HDFC Bank gets a new CEO in Anup Bagchi - Can the share price get a new lease of life too?

HDFC Bank Ltd., India's largest private lender, finally has a new MD & CEO in Anup Bagchi, who takes charge at the end of this month.

This announcement could also come as some much needed respite for its stock price, which features among the worst performing Nifty 50 stocks this year, and also among the biggest contributors to the index's underperformance this year so far.

A combination of slowing growth, margins at all-time lows, and the lack of a clear succession plan led to HDFC Bank's share price being battered this year.

HDFC Bank's share price is down nearly 30% so far this year, the worst it has delivered in a calendar year since 2008, when it fell 42% during the global financial crisis. That was a black swan event. This is also the first instance that the stock has delivered negative returns going all the way back to 2013.

Gurmeet Chadha of Complete Circle Wealth told CNBC-TV18 that HDFC Bank needs a strategic reset and that Bagchi's reappointment paves the way for a significant re-rating at the lender. He added that the move could generate some interest from Foreign Institutional Investors (FIIs) back into the stock.

The persistent selling from Foreign Institutional Investors in India's equity markets was also one of the key reasons behind HDFC Bank's underperformance as it ranks among the largest FII holdings.

At the end of the June quarter, Foreign Institutional Investors held 41.83% stake in HDFC Bank, that is a seven percentage point reduction from the 48.84% they held as of the June quarter in 2025. The September quarter shareholding is yet to be disclosed.

Chadha, however, cautioned that a largecap bank like HDFC Bank will not move violently in terms of share price, but he expects a positive reaction in the stock.

At the time of writing this piece, the US-listed shares of HDFC Bank (ADRs) had gained as much as 5.5% after Bagchi's announcement, but have since pared some of those advances to trade 4% higher.

While FIIs have trimmed their stake in HDFC Bank, retail investors have kept their faith in the lender, with the number of small retail shareholders, or those with authorized share capital of up to ₹2 lakh, increasing from just over 36 lakh in June 2025, to over 44 lakh in June 2026. They continue to hold around 10.3% stake in the lender.

Ashvin Parekh of Ashvin Parekh Advisory Services also told CNBC-TV18 that Anup Bagchi is "a very good choice" for HDFC Bank as he is very versatile, is strong on retail, and that is something that the bank needs.

Alongside the retail investors, the analyst community has also reposed its faith in HDFC Bank throughout this crisis phase. Despite the underperformance of the bank, none among the 49 analysts who cover the stock had a "sell" rating, even though there were two downgrades, one from Investec (Hold from Buy), and the other from HSBC (Hold from Buy). 47 out of the 49 analysts still have a "buy" recommendation on the stock and the consensus estimates of price targets implies an upside potential of 37% for the stock from current levels.

Shailesh Haribhakti, Chairman of Shailesh Haribhakti Associates called Bagchi "an exceptional banker" and one with the "right qualities to lead HDFC Bank to glory." Speaking to CNBC-TV18, Haribhakti said that the lender will have to make sure that customer is the focus to bring back its magic.

Global brokerage firm Nomura had also highlighted in its note on August 31 that a credible successor could become a meaningful re-rating catalyst for HDFC Bank. Kotak Institutional Equities had highlighted that the new CEO must combine strong execution capabilities with a credible roadmap to improve the bank's margins and profitability.

HDFC bank's shares will react to Anup Bagchi's appointment as the new MD & CEO on Monday morning, as Indian equity markets will remain shut on account of Gandhi Jayanti on Friday, October 2. The next major trigger for the stock will be its quarterly business updates and results for the recently concluded quarter.

(With Inputs from Yoosef KP)

Also Read: HDFC Bank leadership transition: From Aditya Puri’s exit to Anup Bagchi — a timeline