Nifty Bank up 2%, hits highest level of CY 2025; ICICI, Kotak at new highs

Bank Nifty: The index was quoting higher for the eighth straight trading day, having rallied 8 per cent during the period

Nifty Bank Today: Banks stocks -- public as well as private -- were in focus on Monday with the Nifty Bank index surging 2 per cent in the intraday trade, hitting its highest level of calendar year 2025 (CY25). The rally in bank stocks came on expectations of healthy earnings ahead, coupled with a broad-based recovery in the markets. Individually, shares of ICICI Bank, and Kotak Mahindra Bank hit their respective all-time highs on the National Stock Exchange (NSE) in the intraday trade today.

 

The Nifty Bank index, meanwhile, added 2.3 per cent to 51,769.80 on the NSE in the intraday trade. The index was quoting higher for the eighth straight trading day, having rallied 8 per cent during the period. In fact, the Nifty Bank index is trading at its highest level since December 30, 2024.

 

 

At 11:57 AM,  the Nifty Bank was the top gainer among sectoral indices on the NSE, eligible in derivatives, and was up 1.99 per cent. By comparison, the Nifty50 index was up 1.1 per cent.

 

Kotak Mahindra Bank, Federal Bank, Canara Bank, and Punjab National Bank were up in the range of 3 per cent to 5 per cent. Axis Bank, Bank of Baroda, State Bank of India (SBI), HDFC Bank, and ICICI Bank were up between 1 per cent and 2.5 per cent.  ALSO READ | Stock Market LIVE: Sensex climbs 1000 pts to 77,900; Nifty at 23,630; Nifty Bank gains 2%

 

According to a report by ICICI Securities, the Nifty Bank Index is undergoing a base formation in the vicinity of 100- weeks EMA, after a 12-per cent correction, which is taking the shape of a double bottom formation.

 

Further, the three months falling trend-line breakout indicates the conclusion of corrective bias that augurs well for the next leg of up move.

 

Among individual stocks, Kotak Mahindra Bank share price hit a new high of ₹ 2,178.50 as it rallied 5 per cent to ₹ 2,180 in the intra-day trade amid heavy volumes. Thus far in the month of March, the market price of the private sector lender has surged 14.5 per cent.

 

In the October to December 2024 quarter (Q3FY25), Kotak Mahindra Bank reported a stable performance despite multiple headwinds, including economic volatility and the RBI's embargo. On a consolidated basis, the growth was driven by a well-diversified portfolio, with strong contributions from secured lending, SME advances, and capital market-related subsidiaries.

 

Despite the embargo, Kotak Mahindra Bank continued to steer healthy growth led by the secured retail and corporate portfolio. The focus on maintaining asset quality remains unabated. However, elevated stress in the microfinance institution (MFI) and credit cards (CC) portfolio could weigh on credit costs in the near-term, analysts have cautioned.  ALSO READ | Sensex jumps 1000 pts, Nifty hits 23,600: Reasons behind market rally today

 

"The bank is aiming at striking a balance to maintain net interest margins (NIMs), by containing CoF while yields remain impacted owing to a lower share of better-yielding products. Kotak Mahindra Bank is also focusing on strengthening the core fee and distribution income profile. Thus, supported by broadly stable margins, strengthening of non-income profile, efforts to optimise costs and gradually stabilising credit costs," analysts at Axis Securities had said in their Q3 results update.

 

Meanwhile, ICICI Bank share price hit a new high of ₹ 1,373, up 2.2 per cent on the NSE in the intraday trade. The stock of the private sector lender surpassed its earlier high of ₹ 1,361.25, which it touched on September 20, 2024. Thus far in the month of March, the stock has surged 14 per cent.

 

ICICI Bank reported a strong quarterly performance in Q3FY25 supported by healthy loan growth, robust asset quality, and improved profitability. The bank has strengthened its position in the competitive Indian banking landscape, driven by consistent growth in its loan and best-in-class asset quality. Despite the industry-wide credit pressures, the bank maintained superior asset quality, with GNPA/NNPA at 1.9 per cent/ 0.42 per cent, supported by prudent underwriting and provisioning practices.  ALSO READ | TVS Holdings gains 3% as board approves 1,860% dividend; check record date

 

With strong underlying and levers to continue delivering better risk-adjusted return, even on a high base, analysts at Elara Capital see the risk of an earnings disappointment rather low. The brokerage firm, in its Q3FY25 result update, said that they believe ICICI Bank has all it takes to be an industry benchmark this cycle and thus sustaining/bettering valuation premium.

 

The focus on enhancing operating leverage, coupled with strong deposit inflows and a favorable credit-deposit ratio, reinforces its long-term growth potential. Additionally, the bank's diversified loan book and emphasis on high-yield segments provide a strong platform for sustained profitability, according to analysts at KRChoksey Shares and Securities.