HDFC Bank, Axis, Kotak Shares Tumble Up To 6% After Q1 Results

Bank Stocks Today: Banking stocks came under pressure on July 20 after several lenders, including HDFC Bank, Axis Bank, Kotak Mahindra Bank and ICICI Bank, reported their earnings for the April-June quarter (Q1FY27) over the weekend. While most lenders posted growth in profit, investors remained cautious over continued pressure on net interest margins (NIMs), leading to a sharp sell-off in private banking stocks.

The Nifty Bank index fell as much as 1.69 per cent to an intraday low of 57,533.10, dragged largely by private sector lenders. The broader weakness was visible in the Nifty Private Bank index, which slipped as much as 2.81 per cent to 27,706.75. On the other hand, public sector banks bucked the trend, with the Nifty PSU Bank index rising up to 1.86 per cent to an intraday high of 8,537.40.

Among the biggest drags on the benchmark banking index were HDFC Bank, Axis Bank and Kotak Mahindra Bank, whose shares declined despite reporting year-on-year growth in quarterly profits. ICICI Bank, however, emerged as an exception, with its shares trading higher after reporting a strong earnings performance.

HDFC Bank Share Price Falls Despite Profit Growth

Shares of HDFC Bank fell up to 5.50 per cent in early trade, making it one of the top drags on the Nifty Bank index as well as on the Nifty 50.

The country's largest private sector lender reported a standalone net profit of Rs 19,060 crore for Q1FY27, up 5 per cent from Rs 18,155 crore a year ago. Net interest income (NII) increased 7 per cent to Rs 33,534 crore from Rs 31,438 crore.

However, other income declined 41 per cent to Rs 12,822 crore, while operating profit fell 21 per cent to Rs 28,168 crore. Provisions rose 17.2 per cent year-on-year to Rs 3,060 crore.

Asset quality remained largely stable, with gross non-performing assets (GNPA) at 1.17 per cent, up 2 basis points sequentially, while net NPA stood at 0.41 per cent, up 3 basis points. Net interest margin narrowed to 3.26 per cent from 3.38 per cent a year ago.

Axis Bank Share Price Slides Over 5 Per Cent

Axis Bank shares tumbled nearly 6 per cent after investors reacted to margin pressure despite better-than-expected earnings.

The lender reported a standalone net profit of Rs 7,114 crore, up 23 per cent year-on-year from Rs 5,806 crore. Net interest income rose 8 per cent to Rs 14,646 crore, while pre-provision operating profit increased 1 per cent to Rs 11,659 crore.

Provisions declined sharply by 44 per cent year-on-year to Rs 2,223 crore, supporting the bottom line.

Gross NPA stood at 1.28 per cent, while net NPA was 0.39 per cent. However, net interest margin declined to 3.46 per cent from 3.62 per cent a year earlier, and the gross slippage ratio increased to 1.79 per cent, indicating continued pressure on asset quality.

Kotak Mahindra Bank Share Price Also Under Pressure

Kotak Mahindra Bank shares also slipped 3.51 per cent to Rs 376.15 apiece after its quarterly earnings, despite reporting healthy growth in profit and net interest income.

The bank posted a standalone net profit of Rs 4,123 crore, up 26 per cent year-on-year from Rs 3,282 crore. Net interest income rose 9 per cent to Rs 7,928 crore, while operating profit increased 10 per cent to Rs 6,131 crore.

Provisions fell 45 per cent to Rs 668 crore, helping improve profitability. Gross NPA improved marginally to 1.18 per cent from 1.20 per cent sequentially, although net NPA edged up to 0.27 per cent. Net interest margin moderated to 4.53 per cent from 4.67 per cent in the previous quarter, while fresh slippages rose to Rs 1,321 crore.

ICICI Bank Bucks Trend

Unlike its private sector peers, ICICI Bank shares gained after the lender reported a strong set of numbers for the June quarter. The bank's standalone net profit rose 16 per cent year-on-year to Rs 14,804 crore, while net interest income increased 13 per cent to Rs 24,385 crore.

Gross NPA improved to 1.38 per cent from 1.40 per cent a year ago, while net NPA stood at 0.35 per cent. Provisions declined to Rs 1,260.5 crore from Rs 1,814.6 crore a year earlier.

The lender also reported an improvement in profitability, with return on assets rising to 2.49 per cent from 2.40 per cent, while net interest margin expanded to 4.36 per cent from 4.32 per cent. Loan growth remained strong at 19.6 per cent year-on-year, supported by healthy credit demand.