HDFC Bank appoints Anup Bagchi as the new CEO

appointed Anup Bagchi as its new Chief Executive Officer following a prolonged period of underperformance. The bank’s Net Interest Margin dropped 12 basis points to 3.26% in Q1 FY27, trailing far behind peers. The appointment comes at a crucial transition point. While loan growth recovered to 15% year-on-year as of June, deposit growth lagged at 14.7%, pushing the Credit-to-Deposit ratio to 95%. Higher borrowing costs inherited from the HDFC Ltd merger and a lower CASA ratio of 32% continue to weigh heavily on margins. However, asset quality remains solid, backed by Rs 37,000 crore in excess provisions (1.2% of the loan book). Headline metrics focus heavily on the CEO transition, but the real story lies in structural margin repair. The stock currently trades at an attractive 1.3x FY28E core book value with a 1.85% Return on Assets and 15% Return on Equity. Earnings acceleration will not come from credit cost reductions, as asset quality is already pristine. Instead, long-term re-rating relies entirely on replacing high-cost borrowings with deposits and expanding margins toward historical levels. Investors should watch the trajectory of Net Interest Margin recovery, progress on reducing the Credit-to-Deposit ratio below 90%, and deposit accretion pace over coming quarters. The stock offers a favorable risk-reward entry at current valuations for long-term investors, provided margin expansion materializes. HDF01 trades at Rs 721.