InvestorQ : As a management shift takes place at HDFC Bank, do you think that the stock will still be as attractive as it was before?
swati Bakhda made post

As a management shift takes place at HDFC Bank, do you think that the stock will still be as attractive as it was before?

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Sam Eswaran answered.
4 weeks ago
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Let me answer your question in two parts. Firstly, I will tell you some points why there is a challenge to HDFC Bank and to the new Chairman, Sasidharan Jagadishan as he takes over the reins from Aditya Puri.

It would not be inapt to say that Jagadishan inherited a bank that anyone would love to lead. HDFC bank has everything going for it. It has low NPAs, high growth and tantalizing NIMs and that is a great combination. That also increases the expectations from the bank.

Then there are challenges emerging from various quarters. PSU banks are being revamped, other private banks are quickly learning the reasons why HDFC Bank succeeded and there is a new animal in the market called Fintech, which is taking the world by storm. All these could distinct challenges to HDFC bank in coming years.

However, there are reasons why they can still do quite well. Credit conservatism is a culture at HDFC Bank and they still have one of the best credit assessment and evaluation teams in the private sector banking space. That is unlikely to change.

Jagadishan was a man personally recommended by Puri and, in a way, he brings the same conservative DNA and banking culture that Puri brought to the bank. The core philosophies are unlikely to change and that is the big positive.

SO, the moral of the story is that not much will change and since the markets prefer a conservative HDFC Bank, they would still have reasons to celebrate.

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