Business

HDFC Bank shares rose nearly 2 per cent in early trading to touch around Rs 734.20 on the NSE. However, the buying momentum failed to sustain and the stock subsequently moved lower. The sharp reversal came despite a broader recovery in the equity market, indicating that investors remain cautious about the private sector lender even after the uncertainty surrounding its leadership succession was removed.

Anup Bagchi’s appointment is significant for HDFC Bank as he will become the first external candidate to take charge as the bank’s CEO. The Reserve Bank of India has approved his appointment for a three-year term beginning October 27. Bagchi will succeed Sashidhar Jagdishan, whose second three-year term is scheduled to end on October 26.

Bagchi is currently the Managing Director and CEO of ICICI Prudential Life Insurance. Before moving to the insurance business, he spent several years in senior positions at ICICI Bank, where he handled important areas including retail and wholesale banking, transaction banking, markets and proprietary trading. He also previously led ICICI Securities.

The appointment has broadly been welcomed by brokerages and market analysts because it removes a major leadership overhang that had been weighing on HDFC Bank. Analysts believe an external leader could bring a fresh perspective, reassess existing strategies and potentially improve investor confidence. The appointment could also give the bank an opportunity to reset its growth strategy and address concerns related to margins, deposits and returns.

However, the technical picture remains less encouraging. According to Vaishnavi Jagtap, Senior Research Analyst at Axis Direct, the medium-term trend for HDFC Bank remains weak as the stock continues to trade below its 100-day and 200-day Simple Moving Averages. The stock has been moving within a broad sideways consolidation range of around Rs 680 to Rs 760 over the past two months.

There are some positive signals on the shorter-term charts. HDFC Bank has moved above its 20-day and 50-day Simple Moving Averages, suggesting that short-term momentum has improved. The daily and weekly Relative Strength Index indicators have also moved into positive territory after recovering from oversold levels. This suggests that some buying interest has emerged at lower levels.

Analysts believe the recent relief rally could extend if the stock manages to maintain its short-term momentum. Axis Direct sees the possibility of a move towards the Rs 760 to Rs 785 zone, while Rs 700 to Rs 705 is being viewed as an immediate support area.

Another important technical level is the Rs 755 to Rs 760 range. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, has identified this area as immediate resistance. The zone also coincides with the 20-week Exponential Moving Average, making it particularly important for traders.

A decisive and sustained breakout above Rs 755 to Rs 760 could improve the technical structure and potentially extend the stock’s recovery. On the other hand, failure to cross this resistance could result in another round of selling pressure.

On the downside, the Rs 685 to Rs 680 region remains a crucial support zone. If the stock falls below this area decisively, the current consolidation could turn more negative and traders may need to remain particularly cautious.

The weakness in HDFC Bank shares has been significant this year. According to the latest market report, the stock has fallen around 28 per cent in 2026, compared with a decline of around 14 per cent in the benchmark Nifty 50. The stock has also delivered negative returns over longer periods, highlighting the extent of its recent underperformance.

The underperformance has been linked to several factors, including concerns over growth and margins following the 2023 merger with HDFC Ltd. The bank has also faced questions around leadership and governance after former part-time Chairman Atanu Chakraborty resigned earlier this year. The leadership transition therefore became an important issue for investors.

The appointment of Bagchi has now removed much of that uncertainty. Market participants are expected to closely monitor how the new CEO approaches the bank’s growth strategy, deposit mobilisation, margins, loan growth and overall operating performance.

There is also some encouraging news on the business front. HDFC Bank reported an 18.8 per cent year-on-year increase in deposits and a 16.3 per cent rise in gross advances as of the end of September. These numbers suggest that the bank continues to maintain healthy business momentum despite the pressure on its share price.

Brokerages remain relatively optimistic about the longer-term prospects of the stock. Analysts believe Bagchi’s experience could help the bank establish a fresh strategic direction and rebuild investor confidence. The stock is also trading at a substantial discount to ICICI Bank on a price-to-adjusted-book-value basis, which could attract value-oriented investors if the bank’s operational performance begins to improve.

LSEG data cited in market coverage shows that analysts remain broadly positive on HDFC Bank, with an average Buy view and a median target price of around Rs 972. This indicates significant potential upside from current levels, although analysts also recognise that the recovery may take time.

For traders, the immediate focus is therefore likely to remain on the technical levels rather than simply the change in leadership. A sustained move above Rs 755 to Rs 760 could strengthen the bullish case and open the possibility of a move towards Rs 785. In contrast, a break below Rs 700 could weaken the short-term setup, while Rs 685 to Rs 680 remains a major support zone.

The bigger question for long-term investors is whether the new CEO can convert the leadership change into tangible improvements in growth, profitability and investor confidence. Bagchi’s appointment provides HDFC Bank with an opportunity to begin a fresh phase, but the stock’s technical weakness shows that investors are still waiting for stronger evidence before turning decisively bullish.

For now, HDFC Bank presents a mixed picture. The leadership uncertainty has eased, business growth remains relatively strong and brokerages continue to see long-term value. At the same time, the stock has significantly underperformed the broader market and remains below important medium-term technical averages. The coming weeks will therefore be crucial in determining whether the new CEO announcement becomes the beginning of a sustained recovery or merely triggers another short-term relief rally.