extended losses for a second consecutive trading session as investor sentiment remained fragile following the
The stock declined 2 per cent in early trade, a major laggard of Nifty 50, on Friday to an intraday low of ₹781 compared with the previous close of ₹798.20. In the prior session, the banking heavyweight had slipped to a 52-week low of ₹770 amid heightened selling pressure.
Market participants reacted cautiously to the unexpected leadership change, which comes at a time when broader markets are already contending with macroeconomic uncertainties. The resignation has triggered concerns around leadership stability and near-term governance visibility, prompting investors to trim exposure despite management assurances.
Brokerages, however, struck a measured tone while acknowledging the sentiment overhang. Motilal Oswal Financial Services said the development has weighed on investor confidence but noted that swift steps taken by the bank’s leadership have helped calm some nerves.
The brokerage highlighted that the management’s assurance, the appointment of Keki Mistry as interim chairman, and the Reserve Bank of India’s endorsement of the bank’s corporate governance and compliance standards have provided comfort to stakeholders. It added that clarity on the appointment of a new chairman and the proposed extension of Managing Director and Chief Executive Officer Sashidhar Jagdishan’s term, which is due in October 2026, should help rebuild trust.
The brokerage emphasised that improvement in operating performance over the coming year will be crucial for the stock’s trajectory. It maintained earnings estimates and expects return on assets and return on equity to reach 1.9 per cent and 14.5 per cent, respectively, by FY27.
Motilal Oswal retained a buy rating on the stock with a target price of ₹1,100.
JM Financial also noted that the resignation has further weakened market sentiment. According to the brokerage, board members indicated they lacked specific clarity on the reasons behind Chakraborty’s resignation but maintained that there were no material or operational issues within the bank. The brokerage highlighted that the Nomination and Remuneration Committee will decide on Jagdishan’s extension, and that the RBI, in a separate communication, reiterated that periodic assessments found no material governance concerns.
JM Financial cautioned that the stock could remain under pressure in the near term as investors seek greater comfort regarding management and board stability following the episode. It added that the upcoming leadership renewal process may also weigh on price performance. The brokerage, which has maintained a relatively cautious stance on the lender in recent months due to fundamental concerns, pointed out that the stock has fallen about 19 per cent over the past three months.
Despite the recent correction, JM Financial said valuations have turned attractive, with the stock trading at around 1.5 times FY28 estimated adjusted book value and the one-year forward adjusted price-to-book ratio standing well below historical averages, though it expects the shares to remain range-bound in the near term.
Adding to the market’s perspective, Jefferies analysts described the current valuation as attractive, noting that the stock was trading at approximately 1.7 times FY27 adjusted price-to-book. While acknowledging the impact of the governance episode on sentiment, Jefferies said that the bank’s board and management have responded proactively by hosting a call to address concerns over the chairman’s exit and reiterating there were no material governance issues. The brokerage pointed out that the interim appointment of Keki Mistry for three months should provide continuity and help ease investor worries. Jefferies maintained its buy rating at ₹1,240 target price.