Strong Q1, growth hopes drive gains for HDFC Bank, ICICI Bank

A steady set of earnings, during the first quarter of the current financial year (Q1FY26) by the country's top two private banks, HDFC Bank and ICICI Bank, and growth expectations, led to a rally in their stock prices on Monday.

- NIKITA VASHISHT

While ICICI Bank gained about 2.8 per cent, HDFC Bank was up 2.2 per cent and were the second and third largest gainers on the Sensex as well the Nifty.

Brokerages are bullish on the prospects of both banks. In addition to an upbeat loan growth in H2FY26 onwards, they expect HDFC Bank to catch up on credit growth amid improved liquidity, with margins likely holding up over the coming financial years.

"HDFC Bank posted a steady quarter with a slight earnings beat due to tax reversals. We tweak our earnings estimates and project HDFC Bank to deliver an FY27 return on asset (RoA) of 1.9 per cent and a return on equity (RoE) of 14.9 per cent," said analysts at Motilal Oswal Financial Services. They reiterate their 'buy' rating on HDFC Bank stock with a higher target price of ₹2,300.