HDFC, Axis, Kotak to Yes Bank: Private bank stocks slip over 5% after Q1 results; ICICI Bank shares outperform

Private banking stocks declined over 5% in early trade on Monday after the lenders announced their Q1 results. The Nifty Private Bank index dropped around 2.72%.

HDFC Bank and Axis Bank shares emerged as the top losers in the Nifty Private Bank index, with a fall of over 5% each. Kotak Mahindra Bank and Yes Bank share price declined over 3% each.

ICICI Bank share price outperformed, as the stock gained as much as 2.47%.

Banks Q1 results showed mixed net interest margin (NIM) trends, with sequential expansion across mid-sized private and state-run banks, while most large private banks reported a mid-teen bps decline, mainly due to loan-mix changes and spread compression.

During the fiscal first quarter ended June 2026, the large private banks also reported broadly stable cost of funds despite CASA ratio moderation, while asset quality remained stable.

Banking stocks to buy

Based on the first set of Q1 results, Axis Bank remains the top pick of Equirus Securities among large private banks, followed by HDFC Bank, ICICI Bank and Kotak Mahindra.

ICICI Bank | Long | Target Price: ₹1,690

The brokerage firm noted that ICICI Bank continues to deliver best-in-class execution, combining resilient margins, sector-leading profitability and strong loan growth. However, it believes much of this is already reflected in its premium valuation.

“Incremental re-rating rationale for ICICI Bank primarily hinges on it sustaining high double digit loan growth with stable RoAs – difficult in our assessment (ex-Repo hike) given corporate loan growth for ICICI Bank also has started clocking higher than retail; CoF having bottomed out; and credit costs normalising as recoveries moderate,” said Equirus Securities.

The brokerage firm retained its ‘Long’ rating and raised ICICI Bank share price to ₹1,690 for March 2027, from ₹1,675 earlier.

Axis Bank | Long | Target Price: ₹1,610

Commenting on Axis Bank Q1 results, Equirus Securities said that the lender appears to be approaching an earnings inflection point, with management indicating that NIMs have bottomed out, retail disbursements are improving, deposit cost pressures are easing, and substantial provisioning buffers should mitigate the ECL transition.

Coming off a lower earnings base, Axis Bank offers the strongest potential for RoA expansion, better earnings compounding and valuation re-rating, it added.

It retained a ‘Long’ rating on Axis Bank shares, and cut the target price to ₹1,610 apiece from ₹1,620 earlier.

HDFC Bank | Long | Target Price: 1,055

HDFC Bank remains a high-quality franchise, although its investment case is increasingly medium term. Near-term NIM recovery is likely to remain gradual amid balance-sheet normalisation and FCNR(B)-related margin pressure, according to the brokerage firm.

However, it expects HDFC Bank to garner a material share of FCNR(B) accretions while continuing to focus on domestic deposit accretion, supporting successful LDR correction and positioning it for stronger loan/earnings growth from FY28. However, this may lead to near term NIM pressures on higher increase in interest expenses.

It has retained a ‘Long’ rating, and cut HDFC Bank share price target to ₹1,055 apiece, from ₹1,160 earlier.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.