As the first quarter of FY25 comes to a close, the banking sector has once again displayed its ability to grow despite economic uncertainty and inflation. Amongst the other Nifty Bank stocks, ICICI Bank stands out as a strong contender.
However, how does it pull together against other key players like HDFC Bank, State Bank of India (SBI), and Axis Bank? Here’s a breakdown of their Q1 FY25 performances to see which one might be the best investment choice.
ICICI Bank’s Performance
ICICI Bank has reported a strong Q1 FY25 with a net profit of ₹11,059 crore, up 14.6% YoY. Net interest income (NII) increased by 7.4% year on year to ₹19,553 crore, driving the rise.
Additionally, the gross non-performing assets (NPA) ratio fell slightly to 2.15% in Q1 FY25, down from 2.16% in Q4 FY24. The net NPA stood at 0.43%, up from 0.42% the previous quarter. So far this year, ICICI Bank shares have risen by more than 21%, beating the benchmark Nifty 50’s 14% increase.
The bank’s focus on growing its retail loan book has improved the bank’s margin profile and stimulated growth, which has helped the ICICI Bank share price.
Comparison with Other Nifty Bank Stocks
When compared to its peers, ICICI Bank holds its own. Let’s compare ICICI to its peers based on net profit and NII.
HDFC Bank: HDFC Bank’s Q1 FY25 net profit rose 33.2% year-on-year to ₹16,470 crore, mainly driven by robust loan growth and reduced provisioning costs. Additionally, its NII is expected to grow by 27% YoY to Rs 29,621 crore in Q1FY24, up from Rs 23,352 crore the previous year.
State Bank of India (SBI): In the first quarter of this fiscal year, SBI’s net profit increased by 0.89% to ₹17,035.16 crore. On a successional basis, net profit fell 17.7%. The bank’s net interest income in the April-June quarter increased by barely 5.71% year on year to Rs 41,125 crore. A year ago, it was Rs 38,905 crore.
Axis Bank: Axis Bank posted a net profit of Rs 6,035 crore for Q1 FY25, up from Rs 3,452 crore in the same quarter last year. Its NII for the quarter increased to Rs 13,448 crore from Rs 11,959 crore in the same quarter last year.
Market Valuation and Investor Sentiment
ICICI Bank’s good financial performance has improved investor sentiment. The ICICI Bank stock price has increased by 18.95% year-to-date, outperforming the bank nifty index, which has risen by around 8% during the same period.
In comparison, HDFC Bank’s stock has declined by 4%, while Axis Bank has seen a modest growth of about 6.67%, and SBI has seen a significant growth of 27.73%.
The price-to-earnings (P/E) ratio for ICICI Bank stands at 17.91, slightly lower than HDFC Bank’s 18.31, indicating that both the stocks are undervalued and remain affordable for the investors. Axis Bank, with a P/E of 13.7, remains the more affordable option, but it also reflects the market’s cautious optimism about its growth potential.
Conclusion
After the first quarter of FY25, ICICI Bank stands out as a strong contender in the Nifty Bank Index. Its impressive financial performance, focus on high-margin segments, and positive investor sentiment give it an edge over its competitors.
Although HDFC Bank and Axis Bank are also performing well, ICICI Bank’s aggressive growth strategy and solid asset quality make it an attractive choice for investors looking to tap into the growth of India’s banking sector.
