Legal review outcome: A welcome relief

Research evidence excerpt

Legal review outcome: A welcome relief

of the review should also allow the Board to PER adj (x) 16.4 14.5 12.4 10.7

turn its attention to other important governance matters, notably the Total DPS [INR] 15.5 9.3 10.9 12.7

Total div yield (%) 1.9 1.2 1.4 1.6

appointment of a permanent Chairman to succeed interim Chairman Keki ROA (%) 1.8 1.8 1.9 2.0

Mistry with media reports indicating former RBI Deputy Governor Rajeshwar ROE (%) 14.0 14.1 14.7 15.0

Rao as a potential candidate for the role. In our view, achieving clarity and P/BV (x) 2.2 1.9 1.7 1.5

stability across the bank’s senior leadership ranks serves as a significant

positive catalyst, allowing management redirecting focus from navigating

governance-related distractions towards driving business momentum and

restoring a full business-as-usual operating cadence.

Overhang ends, shifts focus back to fundamentals

• Overall, we believe the review’s conclusions serve as an endorsement of

HDFC Bank’s governance architecture, We think board processes and

oversight mechanisms reinforce confidence in the institution’s commitment

to transparency and accountability. Importantly, with this governance

overhang now largely behind it, and the RBI reintroducing measures to

HDFCB IN rel BSE Sensex incentivise FCNR deposit mobilisation, we think HDFC Bank appears performance, & rec history particularly well positioned to capture a meaningful share of incremental

foreign currency inflows. The bank’s track record during the 2013 'taper

tantrum' provides a useful precedent: HDFC Bank mobilised approximately

US$3.4bn of FCNR deposits, accounting for roughly 13% of industry FCNR

inflows despite holding only around 5% of system deposits at the time. This

significant outperformance underscores the strength of its NRI franchise