The share price of HDFC Bank has remained in focus over the past few weeks. This was largely due to concerns around the sudden exit of the chairman, the leadership changes and global uncertainties. In today’s trading session (March 30), the share price of the private lender continued to stay under pressure, slipping around 1.6% in intraday trade. The RBI action on forex open position also weighed on sentiment.

While looking at the stock performance of the lender, over the last five days, the stock has fallen 2%, while on a one-month basis, it has dropped nearly 15%. So far in 2026, the stock has declined over 24%.

Despite this correction, global brokerage firm Jefferies has taken a contrarian view on the stock. The brokerage has maintained a ‘Buy’ rating and set a target price of Rs 1,240. This implies a potential upside of around 64% from current levels.

Let’s take a look at why the brokerage is bullish on this stock and its outlook –

Why the stock has been under pressure

According to Jefferies report, the recent fall in the stock price is largely linked to concerns around the exit of the Chairman and the impact of geopolitical tension in West Asia.

These uncertainties have weighed on investor confidence and led to a sharper correction compared to peers.

ALSO READ

The report states, “HDFC Bank’s price is down 24% YTD, underperforming peers, due to concerns around exit of Chairman & impact of West Asia conflict.”

Valuations seen as attractive

Even after the fall, Jefferies believes the current valuation makes the stock appealing. According to the brokerage report, the bank is trading at around 1.6 times its estimated Price-to-Book Value (a ratio comparing market price to book value) for FY27 and about 13 times its Price-to-Earnings ratio (valuation based on earnings).

The report further added, “Valuations are attractive given stronger asset quality, healthy growth & Return on Equity.”

The brokerage also believes that risks related to higher credit costs and slower revenue growth are manageable at this stage.

What could drive a recovery

Jefferies expects clarity on leadership issues to act as a key trigger for the stock.

According to the brokerage report, any update on the Chairman’s appointment or extension of the Chief Executive Officer’s term could improve sentiment and lead to a re-rating of the stock.

Furthermore, Jefferies in its report added that the bank remains among its “sector top picks.”

ALSO READ

Growth outlook remains steady

Looking ahead, the Jefferies expects steady growth. For FY27 and FY28, key financial metrics are expected to remain stable.

Net Interest Margin (NIM) is projected at around 3.5% in FY27 and 3.6% in FY28.

Return on Equity (ROE) is estimated at 14% for both FY27 and FY28.

Asset quality is also expected to hold steady, with Gross Non-Performing Assets (GNPAs) at 1.2% for both FY27 and FY28. Net Non-Performing Assets (NNPAs) at 0.4%.

Merger benefits and near-term risks

The brokerage also highlights the long-term benefits. According to the report, synergies from cross-selling products, better operational efficiency, and improved customer service could support growth over time.

At the same time, it flags near-term risks such as integration challenges, including alignment of teams and technology systems, as well as slower growth in deposits and priority sector lending.