The September-quarter results for the second quarter of FY2026-27 presented a mixed picture for three of India’s leading private-sector lenders: ICICI Bank, HDFC Bank and Axis Bank. ICICI Bank reported strong profit and credit growth, HDFC Bank continued to face pressure on its net interest margin, while Axis Bank posted a substantial rise in net profit.
These contrasting performances have raised questions about which banking stock investors should watch more closely. Profitability, loan growth, asset quality, margin trends and management decisions remain important factors in assessing the outlook for each bank.
ICICI Bank: Strong Earnings and Credit Growth
ICICI Bank reported a 20.1% year-on-year increase in standalone net profit to ₹14,843 crore for the September quarter. Net Interest Income (NII) rose 17.7% to ₹25,339 crore. However, the bank’s Net Interest Margin (NIM) declined by 12 basis points quarter-on-quarter to 4.18%.
Credit growth reached 30% year-on-year and 12% compared with the previous quarter. Growth remained strong even after accounting for the impact of Foreign Currency Non-Resident (FCNR) deposits. Lower operating expenses and provisions helped the bank deliver a profit figure that was 7% above estimates.
The bank is expected to sustain its growth momentum, with margins projected to improve from the third quarter of FY2027. For FY2027 to FY2029, its Return on Assets (RoA) is estimated to remain between 2.2% and 2.3%, while Return on Equity (RoE) is expected to be around 17%.
Overall, ICICI Bank’s latest results highlight strong earnings growth and healthy credit expansion, although the movement in margins remains an important factor to monitor.
HDFC Bank: Asset Quality Improves, Margins Remain in Focus
HDFC Bank recorded a 4.7% year-on-year rise in standalone net profit to ₹19,510 crore. At the same time, its NIM on interest-earning assets declined by 8 basis points quarter-on-quarter to 3.32%.
Asset quality showed improvement during the quarter. The Gross Non-Performing Asset (GNPA) ratio fell from 1.17% in the previous quarter to 1.11%. The bank’s credit growth stood at 16% year-on-year.
Its cost of funds remained stable at 4.4%, while the quarterly decline in NIM was relatively limited. The benefits from changes in deposit interest rates were offset by a higher proportion of term deposits, including FCNR(B) deposits.
Another development attracting investor attention is the planned leadership transition, with Anup Bagchi set to take over as Managing Director and Chief Executive Officer (MD & CEO). Investors will be watching how the new leadership shapes the bank’s strategy, supports margin recovery and sustains growth.
HDFC Bank continues to have a strong underlying foundation, but its future performance will depend in part on management continuity, strategic execution and an improvement in margins.
Axis Bank: Profit Jumps, but Margin Recovery Is Key
Axis Bank reported a 37.6% year-on-year increase in standalone profit after tax (PAT) to ₹7,003 crore in Q2 FY2027. Net Interest Income grew 12% to ₹15,371 crore, while operating profit increased 6% to ₹11,083 crore.
Credit growth reached 22% year-on-year and 9% quarter-on-quarter. The bank’s reported NIM stood at 3.36%, down 10 basis points from the previous quarter. Excluding the impact of FCNR deposits, however, the margin remained stable at 3.47%.
Despite the strong year-on-year profit increase, earnings came in approximately 7% below estimates. Lower income from treasury operations and higher employee-related expenses contributed to the shortfall.
Looking ahead, credit growth is expected to remain healthy, while margins could begin improving from the third quarter of FY2027. Better utilisation of liquidity, an expansion in margins and lower loan-loss provisions could gradually support the bank’s returns.
The key factors to watch will be whether Axis Bank can restore margin momentum, manage costs and convert its credit growth into stronger-than-expected earnings.
ICICI Bank vs HDFC Bank vs Axis Bank: Which Stock Should Investors Watch?
The three banks delivered different results in the September quarter. ICICI Bank stood out for its combination of profit growth and credit expansion. HDFC Bank reported better asset quality, although its margins and leadership transition remain important areas to monitor. Axis Bank recorded the strongest year-on-year profit growth among the three, but its earnings fell short of estimates amid margin pressure and higher expenses.
According to the target prices cited in the Mint report, the figures are as follows:
| Bank | Reported target prices |
|---|---|
| ICICI Bank | ₹1,850 and ₹1,750 |
| HDFC Bank | ₹950 and ₹875 |
| Axis Bank | ₹1,650 |
The report suggests that ICICI Bank has a favourable position in terms of growth and profitability. HDFC Bank could benefit from improvements in margins and the execution of its strategy, while Axis Bank’s outlook may depend on margin recovery and tighter cost management.
Investors should assess these factors alongside their individual financial goals, risk tolerance and investment horizon rather than relying on quarterly profit growth or target prices alone.
Disclaimer: This article is intended solely for informational and educational purposes and should not be considered investment advice or a recommendation to buy or sell any security. It does not endorse or recommend investments in shares, IPOs, mutual funds, precious metals, commodities, REITs, InvITs, alternative investment products or cryptocurrencies. Investors should conduct their own research and consult a qualified financial adviser before making investment decisions.