Uncertainty around CEO Sashidhar Jagdishan's term is weighing on HDFC Bank Ltd.'s stock as investors worry about succession issues at India's largest private-sector lender, according to Macquarie Group Ltd.

While a full three-year term for Jagdishan could remove a key overhang, a shorter extension may signal that the board is searching for a successor, putting further pressure on the lender's shares, analysts Suresh Ganapathy and Dev Shah wrote in a note Thursday.

The concerns highlight how leadership clarity has become a critical factor for HDFC Bank's valuation, even as it remains one of the most influential stocks in India's market. Investors are closely watching any board decision on Jagdishan's tenure, with the outcome likely to shape sentiment toward the lender in the near term.