India’s top private sector lenders—HDFC Bank and ICICI Bank—kicked off Q1 FY26 earnings season with strong performances. HDFC Bank posted a 12% year-on-year (YoY) rise in standalone net profit to ₹18,155 crore, while ICICI Bank outpaced with a 15.5% YoY jump to ₹12,768 crore.
Alongside robust net interest income (NII) growth and stable asset quality, the announcement of a ₹5 dividend and HDFC’s first-ever 1:1 bonus issue drew significant investor attention. Despite near-term market softness, investor optimism remains intact.
HDFC Bank Q1 FY26: Strong Numbers with Special Rewards
HDFC Bank reported a standalone net profit of ₹18,155 crore, up from ₹16,175 crore in Q1 FY25—marking a solid 12% YoY rise. Its net interest income grew by around 6% to ₹77,470 crore, driven by increased interest earnings and consistent loan book expansion.
In a major shareholder-centric move, the bank declared a ₹5 per-share dividend and announced its first-ever bonus issue at a 1:1 ratio, underscoring its long-term confidence in performance and capital adequacy.
Share Market Reaction:
Despite the strong financials, HDFC Bank shares slipped 1.47% to close at ₹1,957.40 on July 18, underperforming the Sensex. Still, shares remain close to their all-time high of ₹2,027.40 hit in late June. Over the last six months, the stock has rallied ~19%, outperforming the Sensex’s ~6% gain.
ICICI Bank Q1 FY26: Outperformance Across Key Metrics
ICICI Bank delivered a 15.5% YoY increase in net profit to ₹12,768.21 crore, beating street expectations. Its net interest income surged by approximately 10.6% to ₹21,635 crore, backed by higher loan volumes and stable net interest margins.
A key highlight was the improvement in asset quality, with the Gross NPA ratio falling to 1.67% from 2.15% in the same quarter last year, reinforcing the bank’s prudent lending and recovery strategies. Total income for the quarter rose nearly 12% to ₹51,451 crore.
Share Price Movement:
ICICI Bank shares edged up 0.52% to ₹1,426.50, defying the broader market’s downtrend. The stock is trading about 3% below its 52-week high of ₹1,471.10.
Technical View:
Short-term technical indicators such as the weekly stochastic hint at bearish momentum. However, the stock remains above its 50-day exponential moving average (EMA), and analysts like Motilal Oswal maintain a “Buy” rating with a target price of ₹1,650—implying a potential 15% upside.
Comparative Performance and Analyst Sentiment
| Metric | HDFC Bank | ICICI Bank |
|---|---|---|
| Net Profit Growth (YoY) | +12% (₹18,155 cr) | +15.5% (₹12,768 cr) |
| Net Interest Income | +6% | +10.6% |
| Asset Quality | Stable | Gross NPA ↓ to 1.67% |
| Corporate Action | ₹5 Dividend, 1:1 Bonus | None |
| Stock Performance (July 18) | –1.47% (₹1,957.40) | +0.52% (₹1,426.50) |
| Analyst Rating | Neutral to Positive | Strong Buy (~15% Upside) |
ICICI Bank outperforms HDFC in profitability growth, NII, and asset quality. However, HDFC’s special dividend and bonus shares add a strong investor appeal ahead of its board’s final decision on July 19.
Conclusion:
Q1 FY26 earnings highlight the strength of India’s private banking sector. ICICI Bank emerges stronger in terms of operational efficiency, NII growth, and asset quality, while HDFC Bank balances steady growth with shareholder rewards.
Investors now await final board decisions from HDFC Bank regarding the bonus issue and interim dividend. Looking ahead, both banks face potential margin compression amid RBI rate trends, but their focus on retail lending and digital transformation positions them well for the rest of FY26.
F.A.Q.
– What is the net profit of HDFC Bank and ICICI Bank in Q1 FY26?
HDFC Bank reported a net profit of ₹18,155 crore, marking a 12% year-on-year growth, while ICICI Bank posted a net profit of ₹12,768 crore, representing a 15.5% increase compared to Q1 FY25.
– What are the key highlights of HDFC Bank’s corporate actions?
HDFC Bank declared a ₹5 per share dividend and announced its first-ever bonus issue in a 1:1 ratio, meaning shareholders will receive one bonus share for every existing share held. The board’s final decision on this is scheduled for July 19, 2025.
– Which bank showed better performance in Q1 FY26?
ICICI Bank outperformed HDFC Bank in key metrics like net profit growth (15.5% vs 12%), net interest income (+10.6% vs +6%), and asset quality (gross NPA declined to 1.67%). However, HDFC Bank’s bonus and dividend announcements added significant shareholder value.
– What are analysts saying about ICICI Bank and HDFC Bank stock?
Analysts such as Motilal Oswal have rated ICICI Bank a “Buy” with a target of ₹1,650, implying around 15% upside. For HDFC Bank, sentiment remains cautiously optimistic, with investors closely watching for board decisions on the bonus issue and dividend.
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