Brokerages back ICICI Bank on strong Q2 earnings, see HDFC Bank recovery ahead
Brokerages remain optimistic about ICICI Bank's strong earnings and asset quality after the recent quarter. However, HDFC Bank's profit growth was modest, and margins are under pressure, leading to a more cautious outlook. Despite this, both banks...
By ET Bureau | Updated:
ETMarkets.com
Top brokerages remained bullish on ICICI Bank and HDFC Bank after their September quarter earnings, though their assessments of the two lenders differed sharply. Analysts were upbeat about ICICI Bank’s stronger-than-expected earnings and resilient asset quality, reinforcing its position as a preferred stock among large private sector banks. Their assessment of HDFC Bank was more measured after the lender reported modest profit growth and pressure on margins. However, attractive valuations, prospects of an earnings recovery and expectations of improved execution amid leadership changes helped sustain the positive outlook.
Both stocks closed lower on Monday, with ICICI Bank falling 1.1% to Rs 1382 and HDFC Bank declining 2.3% to 712. The benchmark Nifty fell 1.11%, while the Bank Nifty slipped 0.6%. According to Bloomberg data, target prices for ICICI Bank imply a potential upside of 24-48%. For HDFC Bank, the target prices indicate potential gains of 17-78%.
HDFC Bank vs ICICI Bank: One has the growth, the other has the valuation edge. Which stock to buy?
