India’s three largest private-sector lenders delivered a mixed performance in the September quarter of FY27, with reporting strong earnings growth, navigating margin pressures and a leadership transition, and Axis Bank posting a sharp rise in profit alongside improving asset quality.
Brokerages remain positive on all three stocks, with Nuvama Institutional Equities retaining a ‘Buy’ rating on each. However, differences in credit growth, profitability and margin trends could influence investors’ choices.
ICICI Bank: Preferred pick on strong growth and profitability
ICICI Bank reported a 20.1% year-on-year rise in standalone net profit to ₹14,843 crore in Q2 FY27. Net interest income (NII) increased 17.7% to ₹25,339 crore, supported by strong loan growth, while net interest margin (NIM) declined 12 basis points sequentially to 4.18%.
Nuvama Institutional Equities retained its ‘Buy’ rating on ICICI Bank with a target price of ₹1,850. The brokerage highlighted credit growth of 30% year-on-year and 12% quarter-on-quarter, which remained strong even after excluding foreign currency non-resident (FCNR) deposits. Lower operating expenses and provisions helped the bank deliver a 7% profit beat against Nuvama’s estimates.
Nuvama expects strong growth to continue, with margins recovering from Q3 FY27. It sees ICICI Bank delivering return on assets (RoA) of 2.2–2.3% and return on equity (RoE) of around 17% over FY27–FY29, making it the brokerage’s preferred pick among large private sector banks.
Systematix Institutional Research also maintained its ‘Buy’ rating and raised its target price to ₹1,750 from ₹1,700. It said the bank’s September-quarter profit of ₹14,843 crore exceeded its estimates by 3.3%, while domestic NIM, excluding the tax refund impact, remained broadly stable at 4.32%.
HDFC Bank: Leadership transition in focus
HDFC Bank reported a 4.7% year-on-year rise in standalone net profit to ₹19,510 crore, while NIM on earning assets declined eight basis points sequentially to 3.32%. The bank’s gross non-performing asset ratio improved to 1.11% from 1.17% in the previous quarter, indicating better asset quality.
The lender is also preparing for a leadership transition, with Anup Bagchi set to take over as managing director and chief executive. His appointment comes at a time when investors are watching management stability, margin recovery and the bank’s ability to sustain growth.
Nuvama Institutional Equities retained its ‘Buy’ rating with a target price of ₹950. It described the quarter as broadly in line with expectations, citing 16% year-on-year credit growth and a limited 8-basis-point sequential decline in NIM. Nuvama believes the bank remains fundamentally sound, but said management stability and strategic recalibration will be important to unlock its potential.
Systematix Institutional Research also maintained its ‘Buy’ rating, with an unchanged target price of ₹875. It noted that the bank’s cost of funds remained stable sequentially at 4.4%, as deposit repricing benefits were offset by a higher term-deposit mix, including FCNR(B) deposits.
Axis Bank: Strong profit growth, but margin pressures persist
Axis Bank reported a 37.6% year-on-year increase in standalone net profit to ₹7,003 crore in Q2 FY27. NII rose 12% to ₹15,371 crore, while NIM stood at 3.36%. Operating profit increased 6% to ₹11,083 crore.
Nuvama Institutional Equities retained its ‘Buy’ rating with a target price of ₹1,650. The brokerage highlighted credit growth of 22% year-on-year and 9% quarter-on-quarter, although NIM declined 10 basis points sequentially. Excluding the impact of FCNR deposits, margins remained flat at 3.47%.
However, lower treasury gains and higher staff costs resulted in a profit miss of around 7% against Nuvama’s estimates. The brokerage expects credit growth to remain strong and margins to recover from Q3 as liquidity is deployed. It also expects improving margins and lower loan-loss provisions to support a gradual recovery in returns.
ICICI Bank vs HDFC Bank vs Axis Bank: Which stock should investors prefer?
Brokerage views favour all three lenders, but ICICI Bank stands out for its credit growth, profitability, and return ratios. Nuvama’s ₹1,850 target price and Systematix’s ₹1,750 target both reflect their positive outlook on the lender.
HDFC Bank offers a potential recovery opportunity, with improving asset quality and a relatively limited margin decline in the quarter. However, investors will watch how the leadership transition shapes the bank’s next phase of growth. Axis Bank’s strong credit momentum and expected margin recovery are positives, although the quarterly profit miss remains a concern.
Based on the brokerage views cited, ICICI Bank emerges as Nuvama’s preferred large-cap private bank, while both HDFC Bank and Axis Bank retain ‘Buy’ ratings.
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