ICICI Bank Vs HDFC Bank Vs Axis Bank: Solid buying activity is anticipated in these companies following the release of strong Q1 results by private lenders like Axis Bank, HDFC Bank, and ICICI Bank. Stock market experts estimate that the Nifty Bank index has increased by around 6% since last week’s session, and after excellent Q1 earnings, this surge in the Bank Nifty index is anticipated to gain more traction. Gaurav Jani, a research analyst at Prabhudas Lilladher, commented on the robust results reported by these private banks, saying: “With normalized business climate, RBI’s sectoral loan data is indicating an upward trend despite the first quarter typically being sluggish, registering a growth of 12.6% YoY in May 2022 (as opposed to a growth of 4.9% YoY in May 2021). YTD credit growth was 1.2% compared to a credit growth of -1.4% during the same time in 2020. Retail offtake is still a cornerstone, and demand for unsecured retail has increased as well. Increased interest rates have caused yields to rise faster than costs, but not yet all of the benefits of higher yields have been realized. The GNPA/NNPAs have been constant QoQ on the asset quality front, which has caused credit costs to decrease.

ICICI Bank

From April to June 2022, ICICI Bank reported an increase in net profit of about 50% to Rs 6,904.94 crore from Rs 4,616.02 crore in Q1FY22. Additionally, the private lender reported a net interest income of Rs 13,210.02 crore in the first quarter of FY23, an increase of 20.8% from Rs 10,935.76 crore in the comparable period of FY2021-22.

Axis Bank

Axis Bank yesterday recorded a net profit of Rs 4,125 crore for the first quarter of FY23, an increase of 91% yearly but no change sequentially. Although the bank exceeded street predictions, its commercial growth momentum lagged behind its competitors.

The bank’s major financial indicators increased, with net interest income increasing by 21% yearly and 6% sequentially and net interest margins increasing by 14 basis points annually and 11 basis points sequentially to 3.60 percentage points during the quarter. The margins at this bank are at a 20-quarter high.

HDFC Bank

Similar to this, HDFC Bank reported a 19% year-over-year (YoY) increase in standalone net profit for the quarter ending June 30, 2022, to Rs 9,195.99 crore. The country’s largest private lender reported a total revenue increase of 13% to Rs 41,560.27 crore in the June 2022 quarter compared to Rs 36,771.47 crore in the June 2021 quarter.

Prabhudas Lilladher stated that they still favor ICICI Bank due to the bank’s persistent outperformance and improved quarterly earnings quality. (Target Price Rs 950), followed by Axis Bank as the preference for profitability over growth could bode well, as systemic asset quality risks are benign and valuation discount with ICICI Bank should narrow (Target Price Rs 940) and HDFC Bank (Target Price Rs 1740) on a long-term basis.

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