The Nifty Private Bank index rallied 2 per cent on the National Stock Exchange (NSE) in Tuesday’s intraday deals led by up to a 3 per cent surge in HDFC Bank, ICICI Bank and Axis Bank.
In the past five trading days, FPIs invested ₹19,000 crore in equity market, data shows. HDFC Bank and ICICI Bank rallied 7 per cent each during the period, against 5 per cent up move in Nifty 50.
At 02:22 PM, the Nifty Private Bank index was up 2 per cent, compared to a 1.1 per cent rise in the Nifty 50.
JM Financial Services has a ’Buy’ rating on ICICI Bank with a target price of ₹1,710 per share.
ICICI Bank continues to demonstrate sector-leading franchise strength, leveraging surging corporate and business banking credit alongside robust non-interest income growth to deliver superior, risk-adjusted operating profitability, the brokerage firm said in its Diwali Picks 2026.
For July to September 2026 quarter (Q2FY27) loan and deposit growth accelerated to 30 per cent year-on-year (YoY) and 27 per cent YoY, respectively, aided by FCNR (B) mobilisation. Excluding this impact, underlying loan growth remained healthy at 24 per cent YoY, led by business banking and domestic corporate demand. Management’s FY26–28E loan/deposit compound annual growth rate (CAGR) expectations of roughly 21 per cent/19 per cent reinforce the bank’s growth visibility.
ICICI Bank continues to deliver sector-leading loan growth, healthy fee traction and best-in-class asset quality, while near- term NIM pressure from FCNR (B) should ease as surplus liquidity is deployed from Q4FY27. Management expects NIMs to moderate further in Q3FY27, with recovery expected from Q4FY27, even without further rate hikes, the brokerage firm said.
Meanwhile, HDFC Bank appears to be nearing an inflection point, with Q2 margins at a trough, improving operating productivity, and accelerating retail/MSME momentum setting the stage for a gradual recovery in earnings. The higher share of floating rate loans, along with an improving mix of better-yielding Retail/MSME loans and focused efforts to mobilise CASA deposits, bodes well from a margins standpoint, analysts at Axis Securities said.
The appointment of Anup Bagchi as Managing Director & Chief Executive Officer (MD & CEO) addresses the leadership overhang; however, his strategic direction, particularly on retail growth, deposit mobilisation and NIM improvement, will be key to sustaining the bank’s re-rating, the brokerage firm said in result update.
Analysts at Axis Securities remain constructive on HDFC Bank’s medium-term growth outlook, supported by improving branch productivity, a gradual recovery in retail credit growth, and a strengthening liability franchise and best-in-class asset quality. “We expect return on asset (RoA) to improve to 1.8-1.9 per cent over FY27-29E. At current valuations, we believe the risk-reward remains favourable, and with most of the risks largely addressed, the downside on the stock appears limited,” analysts said. It has a ‘Buy’ rating on HDFC Bank with a target price of ₹950 per share.
Analysts at Jefferies said that for Q2FY27, Axis Bank’s profit of ₹7,000 crore (up 38 per cent YoY) was ahead of estimates aided by a better topline and lower provisions. Quarter-on-Quarter (QoQ) stable core net interest margins (NIMs) were positive, but drag from FCNR-B was a tad more than estimated; reallocation of loans from corp to retail/SME will aid NIMs. Asset quality continues to improve. Better NIMs & lower credit cost can lift ROE next year, analysts said.
“We raise core estimates but also factor a slight impact on bancassurance fees from FY28 – as clarity is awaited, we take a 30 per cent impact on bancassurance fees. Valuations at 10x FY28E PE & 1.3x adjusted price to book (PB) (FY27E ROE of 14 per cent) offer a 30 per cent discount to ICICI Bank, and PE is at a 7 per cent discount to HDFC Bank. Improvement in ROE can help re-rate, so we maintain our Buy rating & price target of ₹1,700, based on 1.6x Dec-28E adjusted PB,” analysts at Jefferies said in an October 19, 2026 report. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.
