 "HDFC Bank rallies on strong Q2; ICICI Bank dips amid profit-taking")
HDFC Bank, ICICI Bank share price today: Banking bellwether, HDFC Bank, helped the Indian stock markets start the week on a firm footing even as ICICI Bank shares exerted pressure.
Shares of HDFC Bank gained 1.7 per cent to hit a fresh 52-week high of ₹1,020 per share on the National Stock Exchange (NSE). It was among the top gainers in Monday’s session after it reported healthy earnings for the September quarter of the current financial year (Q2FY26).
ICICI Bank share price, on the contrary, slipped 2.7 per cent to ₹1,398 per share. By comparison, the Nifty50 index rose up to 0.8 per cent in the intraday trade and the Nifty Bank index 0.7 per cent – hitting a fresh record high.
India’s biggest private sector bank – HDFC Bank – earned target price upgrades from analysts for a second straight quarter they as reiterated their confidence in the franchise to outpace the industry in the next financial year.
For Emkay Global Financial Services, HDFC Bank is well set to outpace both system growth and some peers in financial year 2026-27 (FY27) and become a "leader in credit market share".
"Thus, better growth, coupled with lower deposit re-pricing and substitution of high-cost e-HDFCL borrowings, should drive margins over FY27-28 and support core profitability," it said.
The brokerage has increased its share price target on HDFC Bank to ₹1,225, maintaining 'Buy' rating.
On October 18, HDFC Bank reported a 10 per cent year-on-year (Y-o-Y) and 4.5 per cent quarter-on-quarter (Q-o-Q) improvement in credit growth, backed by corporate portfolio.
Deposit growth, however, lagged at 12 per cent Y-o-Y and 1 per cent Q-o-Q. Analysts attribute this to possible cut in deposit rates, shedding of high-cost bulk deposits, and improving on-balance sheet liquidity, to fund credit growth after the cut in cash reserve ratio.
This, however, led to better sequential loan-to-deposit ratio (LDR), which, coupled with lower cost of funds (CoF), helped contain margin contraction at 10 basis points Q-o-Q to 3.4 per cent.
Overall, the lender reported net profit of ₹18,641 crore – a rise of 10.8 per cent Y-o-Y, with net interest income growing around 5 per cent on year to ₹31,551.5 crore.
Its asset quality improved over Q1FY26 with gross non-performing assets (GNPA) ratio declining 16bps Q-o-Q to 1.24 per cent and net NPA ratio falling 5bps to 0.42 per cEnt.
ICICI Securities maintained its 'Buy' rating with a higher target price of ₹1,200, factoring return on asset (RoA) of around 1.8 per cent in FY27 and healthy profitability outlook.
"HDFC Bank has already scaled up growth to system level and we expect net interest margin (NIM) to improve from Q3FY26. With superior asset quality and improving core earnings, we expect the stock to outperform," noted analysts at Nuvama Institutional Equities.
The brokerage reiterated 'Buy' with a revised target price of ₹1,170 (from ₹1,135).
Nuvama Institutional Equities has also revised the target price of ICICI Bank stock to ₹1,750 from ₹1,670, while retaining the 'Buy' rating.
The brokerage noted that the banking heavyweight reported core NIM expansion of 3bps Q-o-Q, making it the only bank among the top three private players to report core NIM expansion.
Total NIM at 4.3 per cent, which fell 4bps Q-o-Q, was also better than expectations of a 12-bps decline.
Further, ICICI Bank’s loans book grew 3 per cent Q-o-Q and 10 per cent Y-o-Y while deposits rose 7 per cent Y-o-Y and flat Q-o-Q.
Average deposits grew 9 per cent Y-o-Y and 2 per cent Q-o-Q in Q2 with average CASA growing at 10 per cent Y-o-Y, the highest among peers.
The bank's non-farm slippages fell 8 per cent Q-o-Q, while total slippages fell 19 per cent. With lower slippage and higher recoveries, credit cost fell sharply by 50 per cent Q-o-Q to 26bps from 53bps.
ICICI Bank's retail GNPAs declined to 1.5 per cent from 1.7 per cent Q-o-Q.
Overall it saw a 5.2-per cent increase in net profit at ₹12,359 crore with NII up 7.4 per cent to ₹21,529 crore in Q2FY26.
"Due to a low base in H2FY26, we expect loan growth to rebound closer to mid-teens from 10 per cent. Stable NIM, superior asset quality, and better growth will drive re-rating in the stock," Nuvama noted. For Elara Capital, ICICI Bank's commendable performance in such times does validate its confidence in different outcomes for the bank vs the past cycle. "With robust underlying and levers to continue delivering better risk-adjusted return, even on high base, we see the risk of an earnings disappointment rather low. We believe ICICI Bank has all it takes to be a industry benchmark this cycle, thereby sustaining or improving valuation premium," it said with a 'Buy' rating and a target price of ₹1,707.