HDFC Bank shares are down 20% in 2026 but remain a 'consensus buy'; Here's why the stock is in focus

Shares of HDFC Bank Ltd. are in focus on Monday, June 29, after the lender said the external legal review found no basis to former chairman Atanu Chakraborty's allegations in his resignation.

Chakraborty, in his resignation letter, had cited that the bank's practices were not in congruence with his personal values and ethics.

Over the weekend

, HDFC Bank announced that the external law firms Wilson Sonsini and Wadia Ghandy had concluded their external legal review and submitted a report of the same to the bank's board.

Outcome Of HDFC Bank's External Legal Review

The external review was conducted over three months and covered two years preceding Chakraborty's resignation.

It reviewed whether Chakraborty had recorded any dissent or whether the same was addressed.

The law firms reviewed the HDFC Bank Board and committee minutes, agenda papers, interviews and other documents. This included thousands of documents and interviews with independent directors and senior management.

HDFC Bank said Chakraborty could not be interviewed despite repeated requests by the lender and the external law firms.

His statement and its implications were not substantiated by the record and witness interviews, as per the review.

The meeting minutes process afforded Chakraborty an opportunity to record any concerns. The review did not find any contemporaneous support for his statement in the board or committee records. The witness interviews did not support or substantiate Chakraborty, the review statement said.

It added that no contemporaneous evidence Chakraborty raised concerns or disagreed with the board decisions on the Dubai matter.

The contemporaneous evidence reviewed was inconsistent with the former chairman's statement, it said, adding that the review did not identify any basis for Chakraborty's statement.

Chakraborty says sought repeated clarity

The former HDFC Bank chairman, in an exclusive response to CNBC-TV18 on Saturday, said he repeatedly sought clarity from the lender's board on the scope and legal basis of the independent review that was initiated after his resignation but did not receive any response.

He said he hoped his resignation would prompt the bank's board to introspect on the concerns he had raised rather than focus on what he described as a "compliance exercise".

Jefferies Says "Buy" HDFC Bank

Brokerage firm Jefferies has maintained its "buy" rating on India's largest private lender with a price target of ₹1,050.

The brokerage said that the update comes as a relief for investors and may also lay the path for the bank to not just appoint a new Chairman, but also to renew Sashi Jagdishan's term as CEO, which ends in October 2026.

At 1.7 times adjusted price-to-book for financial year 2027, Jefferies called HDFC Bank's valuations attractive.

JPMorgan Bullish On HDFC Bank

The brokerage is also "overweight" on the lender with a price target of ₹990, stating that the conclusion of the independent legal review should help narrow some of the governance risk premium that has been embedded in the stock since Atanu Chakraborty's resignation.

HDFC Bank is also likely to be a key beneficiary of the recently announced FCNR (B) initiatives announced by the RBI, which should be growth and deposit accretive for the lender, JPMorgan said.

Discounted valuations, which are at multi-year low, continue to remain the key focal point for JPMorgan's positive stance.

Stock performance

Shares of HDFC Bank ended the previous session 0.4% up at 796 apiece. The stock has gained 6.9% in the past month but is down 19.7% this year, so far.