HDFC Bank Shares Rise Over 3% for Second Day After Sharp Fall; Analysts Suggest Buying at Current Levels

Shares of HDFC Bank, India’s largest private-sector lender, extended gains for a second consecutive session on Wednesday, March 25, rising more than 3 per cent to hit an intraday high of ₹791.35 on the NSE. The stock was last trading at ₹792.15, up ₹27.25 or 3.56 per cent for the day. The rally follows a strong performance in the previous session as well. On Tuesday, the stock had climbed 2.8 per cent to close at ₹764.90. Over the past two trading sessions, the share price has rebounded more than 6 per cent from a recent low of ₹744.15.

Market experts believe the recent correction has created an opportunity for long-term investors. Gaurav Sharma, head of research at Globe Capital Market, said that from an investment perspective, the current levels appear attractive. “From an investment perspective, for a one-year horizon and beyond, these levels are attractive for adding to a portfolio,” Sharma said. He added that investors who already hold the stock and have available cash could consider averaging at current levels. According to Sharma, the stock has corrected sharply from above ₹1,000 to around ₹700 — a fall of nearly 30 per cent — making it unusual for a bank of this scale to witness such a steep decline in a short period.

The recovery comes after a sharp correction in the stock earlier this week. Shares of HDFC Bank had fallen nearly 12 per cent over three sessions after the abrupt resignation of non-executive chairman Atanu Chakraborty. In his resignation letter, Chakraborty cited certain “happenings and practices” at the bank that he said were not in congruence with his values and ethics, triggering concerns in the market about governance issues. In a clarification filed with the stock exchanges, the bank said Chakraborty’s sudden exit did not point to any events or practices at the institution that conflicted with his personal values.

Following the development, veteran banker Keki Mistry stepped in as interim chairman. Mistry said the resignation may have stemmed from “relationship issues” between Chakraborty and the bank’s executive leadership but emphasised that there were no “substantive” concerns behind the move. He added that the bank’s governance standards and operational stability remain intact.To address the concerns raised by the letter, the board of HDFC Bank announced on March 24 that it would appoint external law firms to review the circumstances surrounding Chakraborty’s resignation.

The rally in the banking heavyweight also lent support to the broader market, with the benchmark Nifty 50 climbing 514.20 points, or 2.24 per cent, to 23,426.60 during the session, as gains in index heavyweights helped lift investor sentiment.. The BSE Sensex rose as much as 2.38 percent to 75,834.85