Banking Stocks Tomorrow: With the Q1 FY27 earnings season for major banks largely complete, market participants are now shifting their focus from the numbers to how banking stocks could react in the coming sessions. According to experts, the results have reinforced a divergence within the sector, with banks delivering stronger earnings growth, stable asset quality and consistent execution expected to outperform, while lenders facing execution challenges or weaker operating momentum could remain under pressure despite attractive valuations.
Experts also believe public sector banks may continue their strong run in the near term, supported by healthier balance sheets, improving loan and deposit growth and better asset quality.
Geojit Investments’ Gaurang Shah, said, “We have a positive view on all four banks — ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank. Making a short-term call is always difficult. However, my order of preference would be ICICI Bank, followed by Axis Bank, then HDFC Bank and finally Kotak Mahindra Bank.”
“HDFC Bank has seen a lot of negative flow recently and in terms of valuation, it is among the cheapest, if I’m not mistaken. But if I had to pick just one bank based on the Q1 numbers and the earnings outlook, my top choice would definitely be ICICI Bank,” Shah said.
Meanwhile, Hercules Advisors’ Aditya Shah, said, “ICICI Bank has no management issues or unnecessary distractions. It is a straightforward bank that continues to focus on growth while keeping asset quality under control. From my perspective, that’s exactly how it will continue to operate. I think it has long been established that ICICI Bank is the new market leader, while HDFC Bank continues to face challenges.”
“From a valuation perspective, I still believe HDFC Bank offers significant value. The problem, however, is that the bank has not been able to get its act together. So, my order of preference remains ICICI Bank, followed by HDFC Bank, Kotak Mahindra Bank and then Axis Bank. The management execution at HDFC Bank, Kotak Mahindra Bank and Axis Bank remains an area of concern and should continue to be monitored closely,” Aditya added.
Gaurang said, “As for the market reaction on Monday, I believe ICICI Bank is likely to react positively. There could be some pressure on Axis Bank, HDFC Bank and Kotak Mahindra Bank. I think PNB should perform better, and although Yes Bank is not under our coverage, a positive market reaction is expected there as well.”
Talking about PNB, he said, “PNB should start performing better going forward, and I expect this pace of performance to continue in the coming quarters.”
Aditya too is of the same view. He said, “ICICI Bank will continue to do really well and HDFC Bank, Axis Bank and Kotak Mahindra Bank will continue to suffer.”
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
