HDFC Bank vs ICICI Bank vs Axis Bank: Which banking stock to buy after Q3 results 2025?

ICICI Bank Q3 results were the latest announced among these and the shares have reacted positively on Monday. ICICI Bank shares gained nearly 2% after the Q3 results.

Published27 Jan 2025, 10:42 AM IST

Stocks to buy: Analysts have maintained a positive view on HDFC Bank, given its strong Q3 results amid a tough macro environment.(Image: Pixabay)

HDFC Bank, ICICI Bank and Axis Bank, the top three private sector banks in India have declared their earnings for the third quarter of FY25. ICICI Bank Q3 results were the latest announced among these and the shares have reacted positively on Monday. ICICI Bank shares gained nearly 2% after the Q3 results.

Analysts have maintained a positive view on HDFC Bank, given its strong Q3 results amid a tough macro environment. Axis Bank Q3 results were muted, while ICICI Bank Q3 results have been outlier.

Here’s a comparison between HDFC Bank, ICICI Bank and Axis Bank after the Q3 results:

HDFC Bank Q3 Results

HDFC Bank, the largest private sector lender in India, reported a marginal 2.2% year-on-year (YoY) rise in Q3FY25 net profit to ₹16,736 crore, while its net interest income (NII) growth was 8% YoY at ₹30,653 crore. HDFC Bank’s core net interest margin (NIM) in Q3FY25 was 3.43% on total assets, and 3.62% based on interest earning assets.

According to Motilal Oswal, HDFC Bank reported in-line earnings while margins contracted 3 bps QoQ. Deposit growth was strong, while advances growth stood tepid, aligning with the bank’s strategy to reduce the CD ratio at an accelerated pace.

Also Read | ICICI Bank vs IDFC First Bank vs Yes Bank: Which stock to buy after Q3 results?

The brokerage firm cut its earnings estimates for FY26 and FY27 by 3% each, reflecting slower loan growth and CASA moderation. It estimates HDFC Bank to deliver FY26E RoA/RoE of 1.8%/13.9%. It reiterated a ‘Buy’ call on HDFC Bank shares with a target price of ₹2,050 per share.

ICICI Bank Q3 Results

ICICI Bank, the second largest private sector lender in India reported a net profit growth of 14.8% YoY at ₹11,792.4 crore, while NII rose 9% YoY to ₹20,370.6 crore. The lender’s NIM declined to 4.25% in Q3FY25 from 4.43% YoY and 4.27% QoQ. Asset quality in the December quarter was stable sequentially, as the Gross NPA dropped to 1.96% from 1.97%, QoQ, and Net NPA was flat at 0.42%, QoQ.

ICICI Bank once again reported a healthy performance even in the current challenging environment characterized by controlled provisions, impressive cost control, healthy other income, and stable asset quality (ex-agri), Motilal Oswal said.

The brokerage firm tweaked its earnings estimates and projected RoA/RoE of 2.2%/16.8% in FY27. It reiterated a ‘Buy’ rating and raised ICICI Bank share price target to ₹1,550 apiece.

Also Read | Should you buy, sell, or hold ICICI Bank shares after Q3 results?

Axis Bank Q3 Results

Axis Bank reported a 3.83% YoY increase in net profit to ₹6,304 crore, while the bank’s NII rose 9% YoY to ₹13,606 crore, but the net interest margin (NIM) narrowed to 3.93% from 4.01% a year earlier and 3.99% in the preceding quarter.

Axis Bank reported in-line earnings as lower opex offset higher provisions. Asset quality deteriorated slightly as slippages increased sequentially, while GNPA and NNPA ratios were broadly stable. Credit cost rose as the bank tightened its provisioning policy. Deposit growth was muted, while advances grew 9% YoY, leading to a C/D ratio of 92.6%.

Motilal Oswal cut its FY26E and FY27E earnings by 4% and 5% and estimated FY26E RoA and RoE of 1.6% and 14.6%. While the near-term growth and asset quality performance will likely remain suppressed, reflecting the stress in the macro environment, it sees limited downside risk from the current levels. It retained a ‘Neutral’ call on Axis Bank shares with a target price of ₹1,175.

Also Read | Higher provisions, slower loan growth hurt Axis Bank’s Q3 profit

HDFC Bank vs ICICI Bank vs Axis Bank

According to Abhishek Pandya, Research Analyst, StoxBox, in Q3FY25, ICICI Bank delivered a standout performance with a 15% YoY net profit growth, driven by robust 15% credit expansion across Retail, Business Banking, and SME segments.

“Despite margin compression challenges, NIM pressures have moderated, and the bank’s asset quality remains stable with low NPAs. In contrast, HDFC Bank reported steady results, balancing deposit growth and asset quality amidst slower credit expansion. However, the slow credit growth is in line with the bank’s strategy of reducing the CD ratio to pre-merger levels. Further, Axis Bank underperformed with an 8.8% QoQ PAT decline and the slowest advance growth in 15 quarters due to cautious lending and NIM compression,” Pandya said.

Also Read | IDFC First Bank shares slip over 5% after Q3 earnings miss estimates

Considering the above factors and the overall Q3 results, ICICI Bank stands out as the best choice among its peers due to its consistent growth, strong fundamentals, and industry-leading return ratios, he added.

Technicals

Anshul Jain, Head of Research at Lakshmishree Investment and Securities said that the Indian banking sector continued to showcase robust growth, with major private banks like ICICI Bank, Axis Bank, and HDFC Bank presenting diverse investment opportunities.

“Among them, HDFC Bank stands out for a long-term investment horizon of 12-18 months. HDFC Bank stock is forming a strong base on the monthly chart, reflecting significant consolidation and resilience. This pattern suggests a potential breakout with upside targets of ₹2,050 and ₹2,200, making it an attractive pick for investors seeking steady growth,” Jain said.

For short-term traders, he believes Axis Bank offers a promising opportunity.

“Technical indicators for Axis Bank shares suggest a potential bounce to ₹1,025 in the next 1-2 weeks, driven by positive momentum and favorable sentiment. This short-term uptrend aligns well with the broader optimism in the banking sector,” Jain said.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:27 Jan 2025, 10:42 AM IST

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