19 October 2026 Punjab Khabarnama Bureau : Indian private-sector banks ICICI Bank, HDFC Bank and Axis Bank continue to receive positive ratings from brokerages following their second-quarter results for the financial year 2026–27. Analysts have retained their ‘Buy’ ratings on all three lenders, while highlighting recovery in net interest margins (NIMs), credit growth and core profitability as key factors that could shape their performance over the coming quarters.
The September-quarter results showed differences in earnings growth among the three banks. ICICI Bank delivered strong growth in core interest income and profits, Axis Bank recorded a substantial rise in net profit, while HDFC Bank reported comparatively modest earnings growth. Despite these differences, brokerages believe that margin trends and the banks’ ability to sustain lending growth will remain important to their outlook for the rest of FY27.
ICICI Bank Reports Strong Profit and Income Growth
ICICI Bank emerged as a strong performer in the September quarter, reporting a 20.1% year-on-year increase in standalone net profit to ₹14,843 crore. Its net interest income (NII), which represents the difference between interest earned on loans and interest paid on deposits, rose 17.7% to ₹25,339 crore. Strong loan growth and lower provisions for potential bad loans supported the performance.
However, the bank also experienced pressure on its net interest margin. Its NIM declined to 4.18% from 4.36% in the previous quarter, indicating that the improvement in lending income has not entirely offset funding-related pressures.
Brokerages have maintained positive views on ICICI Bank, citing its lending momentum and profitability. Nuvama retained its ‘Buy’ rating with a target price of ₹1,850, while Systematix raised its target price to ₹1,750 from ₹1,700. These are brokerage estimates rather than guaranteed future share prices.
HDFC Bank Faces Pressure on Earnings Recovery
HDFC Bank reported a 4.7% year-on-year rise in standalone net profit to ₹19,510 crore. Net interest income increased by approximately 10%, while credit growth remained healthy at around 16%. However, lower treasury gains and pressure on margins limited the pace of earnings growth.
The bank’s performance has kept attention focused on its ability to strengthen core earnings and improve margins. Analysts are also monitoring management priorities and the impact of the upcoming leadership transition, with Anup Bagchi scheduled to take over as managing director and chief executive.
Nuvama retained its ‘Buy’ rating on HDFC Bank with a target price of ₹950. Elara Capital also maintained a positive rating, setting a target price of ₹923, while highlighting the need for a sustained improvement in margins and core earnings.
Although HDFC Bank’s valuation has fallen below its historical average, a recovery in its share price would depend on the bank delivering better operating performance. A lower valuation alone does not guarantee a rebound.
Axis Bank Records Strong Profit Growth
Axis Bank posted a 37.6% year-on-year increase in net profit to ₹7,003 crore in the September quarter. Net interest income rose approximately 11.8%, reflecting continued growth in lending activity. However, the headline profit increase was partly influenced by a lower comparison base, as the bank had recorded a one-time provision related to priority-sector lending in the year-ago quarter.
The bank’s net interest margin also came under pressure. Foreign-currency deposits raised through the Reserve Bank of India’s FCNR(B) swap window contributed to the decline. Axis Bank indicated that these deposits reduced its margin by around 11 basis points.
Nuvama retained its ‘Buy’ rating on Axis Bank with a target price of ₹1,650. The brokerage expects credit growth to remain supportive and sees scope for margin improvement as the bank deploys available liquidity. Nevertheless, investors will be watching whether the bank can sustain earnings momentum after the benefit of the lower comparison base fades.
Why Margin Recovery Is Important
Net interest margin is a key measure of a bank’s profitability. It reflects how effectively a lender earns interest from its assets relative to the cost of funding those assets. Even when loan growth remains strong, a decline in NIM can restrict the improvement in overall earnings.
All three banks reported margin pressure in the second quarter. Funding costs, changes in the mix of deposits and loans, and the impact of FCNR(B) deposits have affected profitability. Brokerages expect margins to improve over the coming quarters, but the timing and pace of recovery could differ from one lender to another.
The banks will need to balance loan growth with deposit mobilisation and funding costs. If deposit expenses remain elevated while lending rates adjust slowly, margin recovery could take longer than expected. Conversely, improved deployment of funds and a more favourable lending mix could support profitability.
What Investors Will Watch in the Coming Quarters
The remainder of FY27 is likely to bring greater focus on the quality and sustainability of bank earnings. Analysts will monitor quarterly NIM movements, credit growth, deposit growth, bad-loan provisions and returns on assets and equity.
For ICICI Bank, attention will centre on whether strong core income and credit growth can continue while margins stabilise. For HDFC Bank, a sustained recovery in core earnings and improved margins will be important. Axis Bank’s performance will depend partly on whether its lending momentum translates into better margins and returns.
Brokerage ratings reflect analysts’ expectations based on available financial information; they do not ensure that a stock will rise. Actual performance will depend on future results, market conditions, funding costs and broader economic developments.
Outlook
The latest results have kept ICICI Bank, HDFC Bank and Axis Bank in focus among market analysts. ICICI Bank delivered the strongest net interest income growth, Axis Bank recorded the largest percentage increase in quarterly profit, and HDFC Bank continued to face a slower earnings recovery.
The key issue for all three lenders is whether margin pressure eases enough to support stronger earnings in the second half of FY27. Investors will be looking for evidence of that improvement in upcoming quarterly results rather than relying solely on brokerage ratings or target prices.