HDFC Bank stock under continuous selling pressure, slumps 2.5%

Days after it’s chairman Atanu Chakraborty resigned citing ethical concerns HDFC Bank remained under pressure as it’s stock fell about 2.5% as analysts expressed concerns. 

The stock closed at ₹780.45 down 2.41% on the BSE. On Thursday it had plunged over 5%.

In a note Axis Securities said, “On an operational basis, HDFCB has been consistently performing on its guidance in its endeavour to revert to its pre-merger levels across metrics, and its execution capabilities remain strong. However, the stock has already de-rated significantly and currently trades at …. meaningfully below its 5-year average. “

“While re-rating was contingent on the bank’s performance improving and RoA stabilising at near pre-merger levels, the current development will further delay the re-rating of the stock,” it said.

“Governance credibility and management stability remain critical factors, and ambiguity, especially around board-level exits citing values and ethics, would result in a near-term cap on upside, despite operational performance remaining healthy and on an improving trajectory,” the brokerage said.

“Clarity on leadership succession, including appointment of a permanent Chairman and progress on MD & CEO re-appointment, remains a key catalyst,” it added.