Q1 Showdown: Analysts pick top bets as ICICI Bank, HDFC, Axis, Kotak, Yes Bank gear up for results this week

As many as five heavyweight private banks, including HDFC Bank, Axis Bank, Kotak Mahindra Bank, ICICI Bank and Yes Bank, are all set to announce their results for the April-June quarter of the ongoing financial year 2027 on Saturday (July 18), with analysts issuing mixed views on which stock investors may consider buying ahead of the Q1 earnings print.

Yes Bank, ICICI Bank and Axis Bank shares have gained 5-11% this year so far, while those of Kotak Mahindra Bank and HDFC Bank have fallen up to 17% amid multiple headwinds.

What to expect from banks' Q1 earnings?

Nomura in its note said that it expected banks under its coverage to report modest core-PPOP growth, led by soft NII growth and controlled opex, while seasonally higher credit costs keep PAT growth muted. It named ICICI Bank, HDFC Bank and Kotak Mahindra Bank as its top picks.


The international brokerage said that reported loan growth has been strong for HDFC Bank and Yes Bank, but soft for Axis Bank and Kotak Mahindra Bank. For ICICI Bank, Nomura expects loan growth to be strong. However, it overall expects net interest margins to moderate for the lenders.

"We expect Q1 FY27 to be another steady quarter with negative surprise, if any, coming from possible NIM contraction. Provisional numbers suggest solid performance on loan growth across banks (large/mid, public/private/SFB). Asset quality is holding up well across banks and products, with no discernible impact from the current crisis in the Middle East. We prefer frontline banks to others looking at the current macro set-up, which could see NIM pressures abating from hereon," said Kotak Institutional Equities.

Motilal Oswal Financial Services meanwhile said that its channel checks signal towards a strong MSME credit demand in the April-June quarter of the ongoing FY27, with an increase in the working capital cycle. Private banks' share is higher among higher ticket sizes, while public sector banks are gaining incremental market share with competitive pricing and CGTMSE-backed lending, the domestic brokerage added.

Also read: Motilal Oswal's top 4 banking picks ahead of Q1 earnings season. Do you own any?

Which stock to buy ahead of Q1 results?

ICICI Bank is best positioned to capture the momentum, with wholesale and retail franchises firing simultaneously, ROE consistently above 18%, and an asset quality trajectory that remains the cleanest among large private banks, said Vaqarjaved Khan, Senior Fundamental Analyst at Angel One.

HDFC Bank meanwhile carries the governance overhang, according to Khan. This comes after HDFC Bank shares saw a massive selloff in March this year after its former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank were not matching with his personal values and ethics. The private lender later appointed Rajiv Kumar, a former IAS officer and ex-Chief Election Commissioner of India, as its Part-time (Non-Executive) Chairman, concluding a months-long search after the abrupt exit of Atanu Chakraborty in March.

Also read: HDFC Bank shares drop; what lies ahead as lender set to announce Q1 earnings this week?

The analyst added that Kotak Mahindra Bank faces NIM compression, while Axis Bank is solid but lacks the earnings acceleration catalyst. “Yes Bank remains a speculation, not an investment. ICICI Bank is none of those things. It is a compounding machine at a reasonable valuation, entering a quarter where loan growth, treasury income, and controlled credit costs are all expected to converge positively,” he said.

Harshal Dasani, Business Head at INVasset PMS, however believes that HDFC Bank is the defensive choice with the largest franchise depth and the deepest deposit franchise, but the credit-deposit ratio is still normalising after the HDFC merger and NIM absorption on the wholesale book mix, which means that the upside from the print is more muted, which makes this a hold-through-cycle name rather than a tactical pre-earnings position.

Axis Bank has momentum in the retail credit book and improving deposit granularity, but valuation has re-rated meaningfully over the past six months, leaving less cushion on any print miss, Dasani said, adding that Kotak Mahindra Bank has been specifically flagged by street analysts for lower Q1 margins due to bank-specific reasons, and the post-CEO transition is still settling, so the pre-earnings risk-reward is skewed less favourably relative to peers.

“Yes Bank remains a turnaround story with higher beta on both sides of the print and a Neutral rating from Nomura, appropriate only for investors comfortable with turnaround-specific volatility,” according to the analyst, who added that the framework favours ICICI Bank on pre-earnings risk-reward and franchise quality, HDFC Bank on defensive stability through the cycle, and Axis Bank on momentum, with Kotak and Yes Bank as more selective bets that require alignment with investor risk profile. “The stance is not a single-name call but a positioning framework where ICICI Bank has the strongest combination of expected print quality, valuation cushion, and analyst conviction across the cohort,” Dasani concluded.

"Among the four stocks, HDFC Bank and ICICI Bank continue to exhibit relatively stronger technical setups heading into the earnings season, while Kotak Mahindra Bank remains the weakest on the charts. Axis Bank is showing signs of recovery but still lacks confirmation of a sustained uptrend. With earnings due this weekend, any surprise in the results or management commentary could act as the catalyst for the next major move,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

Also read: Private banks may lead PSU peers in Q1 PAT show amid macro pressures

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)