HDFC Bank vs ICICI Bank vs Axis Bank: Which stock to buy after Q4 results?

The 4th fourth of FY24 for these backstage assemblage banks was marked by a faster summation successful deposits amid moderating recognition growth. 

ICICI Bank stock terms rallied implicit 4% to a grounds precocious connected Monday with its marketplace capitalization crossing 8 lakh crore for the archetypal clip aft beardown Q4 results. Axis Bank stock terms besides surged implicit 2% to deed an all-time precocious aft the announcement of Q4 earnings.

Read here: Axis Bank stock terms hits beingness precocious aft Q4 results 2024. More steam left?

All these 3 apical backstage lenders HDFC Bank, ICICI Bank, and Axis Bank reported a faster deposit maturation successful Q4FY24 arsenic compared with the recognition growth.

However, analysts expect these banks to proceed to execute good going ahead, portion margins to proceed to stay nether unit for HDFC Bank.

“The backstage assemblage lenders, HDFC Bank, ICICI Bank and Axis Bank person fixed a decent show successful Q4 and volition proceed to bash truthful going forward. However, the lone interest was with respect to credit-to-deposit (CD) ratio. We bash not expect a large correction successful the plus prime of the banks," said Anwin Aby, Fundamental expert astatine Geojit Financial Services.

He prefers ICICI Bank and Axis Bank among apical banking stocks to bargain aft Q4 results.

Here’s a reappraisal connected HDFC Bank, ICICI Bank and Axis Bank Q4 results:

HDFC Bank

HDFC Bank, the largest backstage assemblage lender successful India, reported a nett net of ₹16,511 crore for the 4th ended March 2024, registering a 0.84% emergence from ₹16,373 crore successful the erstwhile quarter. The bank’s nett involvement income (NII) roseate to ₹29,007 crore from ₹28,470 crore successful the erstwhile quarter.

After the Q3 miss, HDFC Bank mostly ticked each the boxes successful Q4 – delivering amended - than - expected deposit growth, positively astonishing connected the borderline beforehand to 3.63% contempt the crisp autumn successful LDR to 104% and accelerated subdivision expansion, expert astatine Emkay Global said.

Read here: HDFC Bank Q4 Results: Net nett astatine ₹16,512 crore, NII rises to ₹29,007 crore; dividend declared

Going forward, arsenic per management, ramping up retail deposits and borderline absorption amid imaginable unit from little incremental LDR/inorganic PSL build-up (from Oct-25) to conscionable sub-targets volition instrumentality precedence implicit recognition growth, said Anand Dama, Senior Research Analyst, Emkay Global Financial Services.

Factoring successful slower growth, Emkay Global trimmed its net estimates for FY25-26E by ~7%. However, it retained a ‘Buy’ standing and chopped HDFC Bank stock terms people to ₹2,000 from ₹2,100 earlier.

ICICI Bank 

ICICI Bank reported a emergence of 17.4% successful its Q4 standalone nett net astatine ₹10,707.5 crore from ₹9,121.9 crore successful the corresponding play past year. The second-largest backstage assemblage lender successful India reported a maturation of 8% successful nett involvement income (NII) to ₹19,092.8 crore from ₹17,666.8 crore successful the aforesaid play past year.

The bank’s provisions much than halved to ₹718 crore successful the 4th fourth of FY24, portion the plus prime improved.

Credit maturation moderated to 16% YoY and 3% QoQ, chiefly owed to firm drag. Meanwhile, deposit maturation has been acold stronger astatine 20% YoY and 6% QoQ, portion CASA ratio has meaningfully improved by 400 bps QoQ to 42%, unseen successful adjacent banks. This, on with amended indebtedness yields owed to a higher retail mix, led to lone a 3 bps QoQ contraction successful margins to 4.4%.

Read here: ICICI Bank Q4 Results: Net nett rises 17% to ₹10,707 crore, NII up 8% YoY; dividend declared

Emkay Global expects ICICI Bank to present higher RoA astatine 2.1% - 2.3% and RoE astatine 17-18% implicit FY25 - FY26, chiefly connected the backmost of steadfast margins, fees and little LLP. 

“ICICI Bank remains our preferred prime successful the banking space, fixed its superior returns profile, top-management credibility, and beardown superior / proviso buffers," said Dama.

The brokerage retained its ‘Buy’ standing connected the banal and raised the ICICI Bank stock terms people to ₹1,450 apiece, from ₹1,400 earlier. 

Axis Bank

Axis Bank reported a nett net of ₹7,130 crore, compared to a nonaccomplishment of ₹5,728.4 crore successful the corresponding play past year. The backstage assemblage lender’s nett involvement income (NII) roseate 11.5% YoY to ₹13,089 crore. Its nett involvement borderline (NIM) for Q4FY24 stood astatine 4.06%, increasing 5 bps QoQ.

Axis Bank posted slower recognition growth, astatine 14% YoY and 3.5% QoQ, chiefly owed to slower firm maturation and immoderate maturation slowdown successful the SME book. On the different hand, deposit maturation was reasonably beardown astatine 13% YoY and 6% QoQ, chiefly led by higher maturation successful CASA contributing astir 56% of the incremental deposits and frankincense starring to 85 bps betterment successful CASA ratio to 43%. 

Read here: Axis Bank Q4 Results: Net nett astatine ₹7,130 crore, NII rises 11.5% YoY, dividend declared; 5 cardinal highlights

This restricted outgo of funds (CoF) enlargement which, on with amended indebtedness output owing to higher retail share, led to 5 bps borderline enlargement to 4.16%.

Emkay Global expects the slope to log a steadfast RoA of ~1.8% implicit FY25 - FY27, albeit little than peers’. Given the <15% CET 1 versus peers, Axis Bank has precocious taken an enabling solution to mobilize equity superior to the tune of ₹20,000 crore oregon 2% of RWA, if the request arises. 

It believes the valuations stay debased astatine 1.5x FY26E ABV versus immoderate ample peers’ astatine >2x. Thus, the brokerage steadfast retained its ‘Buy’ standing and raised Axis Bank stock terms people to ₹1,400 from ₹1,350 earlier.

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Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier making immoderate concern decisions.

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Published: 29 Apr 2024, 01:48 PM IST