HDFC Bank vs ICICI Bank: Which stocks to buy post results?

HDFC Bank vs ICICI Bank shares: Nifty Bank index heavyweights HDFC Bank and ICICI Bank reported January-March quarter earnings for the financial year 2022-23 (Q4FY23) on the 15th and 22nd of April respectively. Beating Dalal Street estimates, ICICI Bank reported a 27.64 per cent jump in consolidated net profit, while HDFC Bank reported a 19.8 per cent jump in net profit for the January-March quarter.

HDFC Bank earnings vs ICICI Bank earnings

Net profit

ICICI Bank: The bank recorded a consolidated net income of ₹53,922.75 Cr during Q4FY23, up by 25.88% YoY from ₹42,834.06 Cr during Q4FY22. ICICI Bank said its net expenses stood at ₹38,716.56 Cr during the quarter ended March 2023 as against ₹31,306.02 Cr during the same quarter of the previous financial year.

HDFC Bank: HDFC Bank posted 19.8% growth year-on-year in net profit to ₹12,047.5 crore for the fourth quarter ending March 31, 2023 (Q4FY23). Net interest income (NII) jumped by 23.7% to f 23,351.8 crore in the quarter under review

NPAs

ICICI Bank: The share of gross non-performing assets in the overall loans was 2.81 per cent as of March 31, 2023, which is an improvement from 3.60 per cent in the year-ago period and 3.07 percent in the quarter-ago period.

HDFC Bank. Regarding asset quality, HDFC Bank's gross NPA declined to 1.12% of gross advances in Q4FY23 as against 1.23% in Q3FY23 and 1.17% in Q4FY22. The Q4FY23 gross NPA excludes 0.94% NPAs in the agricultural segment.

Total deposits

ICICI Bank: ICICI Bank said its total deposits grew by 10.9% year-on-year to ₹1,180,841 crores during March 31, 2023 quarter and the average CASA ratio was 43.6% in Q4-2023. The domestic loan portfolio grew by 20.5% year-on-year and the net NPA ratio declined to 0.48% during Q4FY23 from 0.55% in Q3FY23.

HDFC Bank: Total deposits stood at ₹1,883,395 crore in Q4FY23, up by 20.8% YoY. CASA deposits rose by 11.3% with savings account deposits at ₹562,493 crore and current account deposits at ₹273,496 crore. Time deposits were at t 1,047,406 crore, an increase of 29.6% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 44.4% of total deposits as of March 31, 2023.

Dividend

ICICI Bank: The bank's board on Saturday recommended a dividend of eight rupees per share, subject to requisite approvals.

HDFC Bank: The bank, however, did not choose to announce any dividends.

Stock price today

ICICI Bank: ICICI Bank's stock price was trading at ₹896 apiece on NSE at the time of writing this story

HDFC Bank: HDFC Bank's stock price was trading at ₹1,675 apiece on NSE at the time of writing this story

Which stocks to buy?

“If someone has to choose between HDFC Bank and ICICI Bank, then my suggestion for such an investor is to go for HDFC Bank, especially if the perspective is medium to long-term,” said Ravi Singhal, CEO at GCL Broking

Despite Q4 results below estimates, HDFC Bank should be preferred over ICICI Bank as the twin merger will lead to improvement in the net income margins of the bank. Hence, strong financials of the private lender in upcoming quarters can be expected, added Singhal.

Analysts have handpicked ICICI Bank, andHDFC Bank, among other stocks to make the most of the current juncture on Dalal Street.

Motilal Oswalhas a 'buy' rating for HDFC, and ICICI Bank post Q4 results.

ICICI Bank

Meanwhile, the Indian stock market opened Monday's trade on a firm note today. Three factors - excellent Q4 results from ICICI Bank, better-than-expected Q4 results from Reliance, and RBI's approval for the merger of HDFC in HDFC Bank - augur well for Indian stock markets as these stocks have a sizable weightage in the indices, ANI quoted VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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 taking any investment decisions.