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Banks (Finance)

HDFC Bank and ICICI Bank Show Strong Q1 Performance, Analysts Predict Up to 20% Upside

Strategic Insights

— 2 min read

HDFC Bank and ICICI Bank, two leading private sector banks in India, have shown robust performance in their Q1 results, exceeding estimates and making them prominent in the top banking picks of most brokerage houses. Despite the banking sector being under pressure, these two banks have delivered steady returns and maintained strong asset quality. A closer look at their individual stock price movement, margins, and earnings performance reveals some interesting facts. Analysts predict significant upside for both stocks, with key brokerage houses seeing up to 20% upside for HDFC Bank and 14-17% for ICICI Bank.

Key Takeaways:

  • HDFC Bank's share price has delivered 10% returns in 6 months and is up over 17% in the last one year, while ICICI Bank's share price has delivered 16% returns in 6 months and is up 13.5% in the last one year.
  • HDFC Bank has maintained strong asset quality with the net NPA ratio at 0.4% in FY25 and 0.5% in Q1FY26, while ICICI Bank's net NPA ratio was 0.41% in Q1FY26.
  • HDFC Bank's asset quality remains healthy across corporate, rural, and agriculture segments, while ICICI Bank has a contingency provisioning buffer of Rs 13,100 crore (1% of loans).
  • HDFC Bank's NIM contraction was 10 bps QoQ to 9.5% in Q1FY26, while ICICI Bank's NIM decline was 7 bps QoQ to 4.34% in Q1FY26.
  • HDFC Bank's gross slippage was Rs 9,000 crore (1.5% annualised) vs. Rs 7,500 crore last quarter, while ICICI Bank's gross slippage was Rs 6,200 crore (2% annualized) vs. Rs 5,100 crore last quarter.
  • Key brokerage houses, including Jefferies and Motilal Oswal, see significant upside for both stocks, with Jefferies predicting over 20% upside for HDFC Bank and Motilal Oswal seeing 14-17% upside for both banks.

Statistics:

  • HDFC Bank's share price movement: -5% in the last 1 month, 10% returns in 6 months, and 17% returns in the last 1 year.
  • ICICI Bank's share price movement: -6% in the last 1 month, 16% returns in 6 months, and 13.5% returns in the last 1 year.
  • HDFC Bank's net NPA ratio: 0.4% in FY25 and 0.5% in Q1FY26.
  • ICICI Bank's net NPA ratio: 0.41% in Q1FY26.
  • HDFC Bank's NIM contraction: 10 bps QoQ to 9.5% in Q1FY26.
  • ICICI Bank's NIM decline: 7 bps QoQ to 4.34% in Q1FY26.
  • HDFC Bank's gross slippage: Rs 9,000 crore (1.5% annualised) vs. Rs 7,500 crore last quarter.
  • ICICI Bank's gross slippage: Rs 6,200 crore (2% annualized) vs. Rs 5,100 crore last quarter.

Sources:

  • "HDFC Bank Vs ICICI Bank: Share price performance" from Contify.com
  • "HDFC Bank Vs ICICI Bank: Asset quality stable" from Contify.com
  • "HDFC Bank Vs ICICI Bank: How do the margins stack up?" from Contify.com
  • "HDFC Bank Vs ICICI Bank: Slippages a concern?" from Contify.com
  • "HDFC Bank Vs ICICI Bank: Brokerage views and target price" from Contify.com

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