Now Reading: Large private banks seen as re-rating candidates despite Q1 margin pressure
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Large private banks seen as re-rating candidates despite Q1 margin pressure
Large private banks seen as re-rating candidates despite Q1 margin pressure
Brokerage ICICI Securities says HDFC Bank, Kotak Mahindra Bank and Axis Bank are re-rating candidates for FY27 despite weak Q1 margin performance. The sector's NII growth reached a multi-quarter high of 11…
Brokerage ICICI Securities says HDFC Bank, Kotak Mahindra Bank and Axis Bank are re-rating candidates for FY27 despite weak Q1 margin performance. The sector's NII growth reached a multi-quarter high of 11 per cent YoY, while core PPOP and PAT growth improved to 15-17 per cent YoY, according to the brokerage. However, the three large private banks reported only about 1 per cent QoQ NII growth and 7-9 per cent YoY growth as net interest margins declined.
Separately, JM Financial flagged risks for HDFC Bank after analysing its FY26 disclosures. The brokerage cited a declining retail deposit share, higher reliance on wholesale funding, a moderation in LCR to 114 per cent, and a sharp rise in contingent liabilities. Agriculture emerged as a key stress pocket with rising delinquencies. ICICI Bank has overtaken HDFC Bank in dollar bond fundraising under the RBI's discounted window, raising $3.05 billion against HDFC Bank's $2.50 billion.
Indian Opinion Analysis
ET BFSI's analysis frames large private banks as re-rating candidates, emphasising sector-wide NII growth and FCNR(B) inflows as positive catalysts. BusinessLine's report, by contrast, focuses on HDFC Bank's specific pressures: falling share price, rising contingent liabilities, and deteriorating retail deposit share. The two pieces serve different audiences: ET BFSI addresses institutional investors with a bullish sector view, while BusinessLine gives retail investors a granular risk checklist. ET BFSI omits the stock-level stress BusinessLine details. BusinessLine does not engage with the sector re-rating thesis. The divergence suggests that the sector outlook and individual bank health may be decoupling.
Coverage: 2 sources, 2 neutral
Sources (2): bfsi.economictimes.indiatimes.com (neutral report), thehindubusinessline.com (neutral report)
This brief was synthesised by AI from the 2 sources linked above, so one read covers every framing they carry.
Updated: this story now draws on 2 sources.
