India’s top private lenders—HDFC Bank, Kotak Mahindra Bank, and Axis Bank—have released their Q1 FY26 results, offering a mixed bag of performance metrics. While HDFC Bank maintained its leadership with solid profitability, Kotak faced a sharp decline due to one-off effects, and...
India’s top private lenders—HDFC Bank, Kotak Mahindra Bank, and Axis Bank—have released their Q1 FY26 results, offering a mixed bag of performance metrics. While HDFC Bank maintained its leadership with solid profitability, Kotak faced a sharp decline due to one-off effects, and Axis Bank grappled with asset quality pressures. Here’s a comprehensive breakdown of how each bank fared and what it signals for investors.
Performance snapshot
1. HDFC Bank
Net profit rose 12.2 percent year-on-year to Rs 18,155 crore
Net interest income (NII) grew 5.4 percent YoY to Rs 31,440 crore
Net interest margin (NIM) stood at 3.5 percent, down from 3.7 percent last year
Gross NPA increased to 1.40 percent from 1.33 percent; net NPA rose to 0.47 percent
Provisions surged to Rs 14,441 crore, including Rs 9,000 crore in floating provisions
Announced Rs 5 interim dividend and a 1:1 bonus issue
2. Kotak Mahindra Bank
Standalone net profit declined 47 percent YoY to Rs 3,282 crore due to absence of last year’s Rs 3,519 crore divestment gain
Adjusted profit fell 7 percent YoY
NII rose 6 percent YoY to Rs 7,259 crore
NIM remained highest among peers at 4.65 percent
Gross NPA at 1.48 percent; net NPA at 0.34 percent
Provisions doubled to Rs 1,200 crore, driven by stress in microfinance and commercial vehicle portfolios
3. Axis Bank
Net profit fell 4 percent YoY to Rs 5,806 crore
NII grew marginally by 1 percent YoY to Rs 13,560 crore
NIM stood at 3.8 percent, down from 4.05 percent last year
Gross NPA rose to 1.57 percent from 1.28 percent; net NPA increased to 0.45 percent
Provisions jumped 93 percent sequentially to Rs 3,948 crore due to tighter asset classification norms
Operational metrics and asset quality
Advances growth:
Kotak Mahindra Bank led with 14 percent YoY growth to Rs 4.4 lakh crore
Axis Bank grew 8 percent YoY to Rs 10.59 lakh crore
HDFC Bank posted 6.7 percent YoY growth to Rs 26.28 lakh crore
Return on assets (RoA):
Kotak and HDFC both reported average RoA of 0.48 percent for the quarter
Axis Bank’s annualized RoA was lower at 1.47 percent
Investor sentiment and valuation
Stock performance:
Kotak Mahindra Bank closed at Rs 2,125, down 0.8 percent, near its 52-week high of Rs 2,301
HDFC Bank ended at Rs 2,004.5, down 0.5 percent, close to its 52-week high of Rs 2,035
Axis Bank’s sentiment weakened due to asset quality concerns
Valuation multiples:
Kotak trades at a P/E of over 28 times FY26 earnings
HDFC Bank at over 20 times
Axis Bank at nearly 14 times, reflecting lower investor confidence
Outlook and strategic considerations
RBI’s recent rate cuts have impacted NIMs across the board, with deposit rate adjustments lagging behind loan repricing
Kotak’s branch network of 2,154 outlets will be crucial in mobilizing low-cost CASA deposits
HDFC Bank’s provisioning buffer signals caution amid macro uncertainties
Axis Bank’s aggressive provisioning and tighter norms may stabilize asset quality in coming quarters
Conclusion
HDFC Bank continues to set the benchmark in profitability and capital strength, while Kotak Mahindra Bank’s results were skewed by last year’s exceptional gains. Axis Bank’s conservative stance on asset quality may pay off in the long run, but near-term pressures persist. Investors will be watching how these lenders navigate margin compression, provisioning spikes, and regulatory shifts in the quarters ahead.
Sources: Financial Express