ICICI Bank, HDFC Bank, SBI, Axis Bank: Which Banking Stock to Buy Ahead of Q2 Results – What Experts Suggest
- October 15, 2026
- Posted by: Ankit Jaiswal
- Category: News
HDFC Bank, ICICI Bank and Axis Bank report Q2 FY27 results on Saturday 17 Oct 2026. Brokerages expect healthy loan growth, with Systematix seeing about 15% profit growth for banks excluding IndusInd, but net interest margins are expected to fall by about 7 basis points QoQ as FCNR(B) deposits raise funding costs. Every brokerage I found keeps a Buy on the large private banks and SBI, with ICICI Bank and SBI named as top picks by Systematix and Axis Securities.
Quick Answer
Brokerages expect healthy Q2 FY27 earnings from large bank stocks, with Systematix forecasting about 15% year on year profit growth for the banks it covers excluding IndusInd, helped by loan growth and lower provisions. The pressure point is margin, because FCNR(B) deposits of about 132.9 billion dollars lift deposit costs and Systematix expects net interest margins to fall by about 7 basis points on average from the June quarter. ICICI Bank and SBI are the most repeated top picks, named by both Systematix and Axis Securities, while Jefferies sees the highest upside in Axis Bank and IndusInd. These are brokerage views and not a recommendation, so check the results of HDFC Bank, ICICI Bank and Axis Bank on 17 October before you buy.
Bank stocks have fallen this year even as loan growth has picked up, and the Q2 FY27 results season is the next test. The headline question is which of ICICI Bank, HDFC Bank, SBI and Axis Bank experts prefer before the numbers arrive.
This guide sets out what brokerages expect from bank stocks in Q2, how FCNR(B) inflows affect margins, the target price views on each bank and the risks. Figures come from brokerage notes reported by the press, and I flag where they disagree.
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What Brokerages Expect From Bank Stocks in Q2 FY27
| Expectation | View | Source |
|---|---|---|
| Profit growth | About 15% YoY, excluding IndusInd, on loan growth and lower provisions | Systematix |
| Net interest margin | Down about 7 bps QoQ on average; about 10 bps lower for several lenders | Systematix; Axis Securities |
| Systemic credit growth | About 18.8% YoY | Axis Securities |
| Asset quality | Fresh slippages to fall QoQ on KCC loan seasonality; overall healthy | Systematix; Axis Securities |
| Treasury income | Likely to fall at most banks as higher G-Sec yields cut trading gains | Systematix |
| Fee income | Expected to grow ahead of advances at HDFC Bank and SBI | Systematix |
Nirmal Bang noted in early September that loan growth across its covered banks rose to 17.2% YoY in Q1 FY27 from 15.1% in Q3 FY26, while deposit growth was slower at 12%. Q2 is the quarter in which deposits caught up for bank stocks, and that is where the margin story comes from.
Risk: Brokerage estimates for bank stocks are made before results, and a margin miss at one large bank can pull down all bank stocks together.
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FCNR(B) Inflows: Why Margins May Squeeze
| Data point | Figure | Date |
|---|---|---|
| FCNR(B) inflows under the RBI swap window | $132.9 billion | 31 Aug 2026 |
| System deposit growth | 17.3% YoY, 6.9% QoQ | 15 Sep 2026 |
| Advances against fixed deposits, including FCNR(B) | Up 43.2% | August 2026 RBI data |
| Axis Bank advances excluding FCNR(B)-linked loans | Up 18.8% YoY | Q2 business update |
| Axis Bank deposits excluding FCNR(B)-linked | Up 17.0% YoY | Q2 business update |
Systematix says that for bank stocks a higher share of term deposits is expected to raise deposit costs, lower CASA ratios and weigh on margins and loan yields. Jefferies takes a milder view: underlying loan growth excluding FCNR(B)-linked lending remained broadly steady, and banks used part of the FCNR(B) money to replace relatively expensive funding and to strengthen liquidity coverage ratios.
Both views can be right for bank stocks. The deposit mix is better in quality, but the cost is higher, so the net interest margin may fall even as funding improves. Watch the CASA ratio and the cost of deposits in the Q2 results of each of the bank stocks.
Risk: If FCNR(B) money leaves or is not lent at good yields, margins at bank stocks could fall further than the 7 basis points that brokerages expect.
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Bank Stocks Target Price View: ICICI Bank, HDFC Bank, SBI, Axis Bank
| Bank | Systematix (6 Oct) | Jefferies (7 Oct) | Nirmal Bang (6 Sep) |
|---|---|---|---|
| ICICI Bank | Buy, Rs 1,700; NIM down more than 10 bps; top pick | Rs 1,750 vs Rs 1,343 (about 30% upside) | Buy, Rs 1,820 |
| HDFC Bank | Buy, Rs 870; NIM down 5 to 10 bps | Rs 880 vs Rs 706 (about 25% upside) | Buy, Rs 1,020 |
| SBI | Buy, Rs 1,220; top pick; higher credit costs expected | Not covered in my source | Buy, Rs 1,275 |
| Axis Bank | Buy, Rs 1,500; NIM down 5 to 10 bps | Rs 1,700 vs Rs 1,243 (about 37% upside) | Not covered in my source |
| Kotak Mahindra Bank | Buy, Rs 515; top pick | Rs 460 vs Rs 434 (about 6% upside) | Not covered in my source |
| IndusInd Bank | Hold, Rs 950 | Rs 1,250 vs Rs 898 (about 39% upside) | Not covered in my source |
Upside for Jefferies is my calculation from its target price and the share price on 7 October, so it is out of date today. The HDFC Bank target price ranges from Rs 870 to Rs 1,020 across the three brokerages, which shows how wide the views are even on the largest private bank.
Axis Securities also lists ICICI Bank, Kotak Mahindra Bank, SBI, Federal Bank, AU Small Finance Bank, Bajaj Finance and Shriram Finance among its top picks for the quarter. Systematix and Axis Securities both name ICICI Bank and SBI, so those two are the most repeated bank stocks across the notes I found.
Risk: A Buy rating and a target price are not a guarantee, and bank stocks have fallen by up to 29% this year, with the BSE Bankex down about 8%.
Q2 Business Updates and Result Dates
| Bank | Advances | Deposits | Result date |
|---|---|---|---|
| HDFC Bank | About Rs 33,075 billion, up about 15.3% YoY | About Rs 33,275 billion, up about 18.8% YoY | Saturday 17 Oct 2026 |
| Axis Bank | Gross Rs 13,846 billion, up 22.7% YoY and 8.8% QoQ | Rs 14,521 billion, up 20.7% YoY and 5.8% QoQ | Saturday 17 Oct 2026 |
| ICICI Bank | No Q2 business update found | No Q2 business update found | Saturday 17 Oct 2026 |
| SBI | Not found | Not found | Date not found |
Jefferies puts HDFC Bank loans up 16% and deposits up 19% for the quarter, which differs slightly from the 15.3% and 18.8% above, and the sources do not say if the figures are standalone or consolidated. Use the Q2 results on 17 October for the final numbers.
Risk: Results on a Saturday mean the share price reaction of bank stocks comes on the next trading day, Monday 19 October.
Which Bank Stocks Look Best Placed Before Q2?
| If you care most about | What the notes suggest |
|---|---|
| Repeated top picks | ICICI Bank and SBI, named by Systematix and Axis Securities |
| Upside to target price | Jefferies shows the most upside in Axis Bank and IndusInd, from older prices |
| Margin pressure | Systematix expects the largest NIM fall at ICICI Bank and Kotak Mahindra Bank, over 10 bps |
| Loan growth | Axis Bank at 22.7% YoY and Kotak Mahindra Bank at 25% in the Jefferies note lead HDFC Bank |
| Asset quality | Systematix expects higher credit costs only at SBI; others stable or lower |
No single bank wins on every measure, and the reason is that bank stocks differ in margin, growth and credit cost. A diversified basket of bank stocks, or waiting for the 17 October results, may suit investors who do not want to bet on one number.
Risk: Buying before results is a bet on estimates, and the same stock can rise or fall on a small surprise.
What to Watch Next for Bank Stocks
- HDFC Bank, ICICI Bank and Axis Bank results on 17 October
- Net interest margin and CASA ratio of bank stocks against the 7 basis point fall that brokerages expect
- Management comments on FCNR(B) deposits and how they will be lent
- The SBI Q2 results date and its credit costs
- Fresh target price changes from Jefferies, Systematix and Nirmal Bang after results
Conclusion
Brokerages expect healthy Q2 earnings but weaker margins, and they back the large bank stocks, with ICICI Bank and SBI the most repeated top picks. Wait for the 17 October results or size your position for the margin risk.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
Which bank stocks do brokerages recommend before Q2 results?
Ans. Systematix and Axis Securities both name ICICI Bank and SBI among their top picks. Jefferies has Buy calls on ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank.
When do HDFC Bank, ICICI Bank and Axis Bank report Q2 FY27 results?
Ans. All three are scheduled to report on Saturday 17 October 2026. I could not find the SBI date.
What do brokerages expect for bank profits in Q2 FY27?
Ans. Systematix expects about 15% year on year profit growth for the bank stocks it covers, excluding IndusInd, driven by loan growth and lower provisions.
Why could margins of bank stocks fall in Q2?
Ans. FCNR(B) inflows of 132.9 billion dollars raise term deposits and deposit costs, and Systematix expects net interest margins to fall about 7 basis points QoQ on average.
What is the ICICI Bank target price?
Ans. Systematix has Rs 1,700, Jefferies has Rs 1,750 and Nirmal Bang has Rs 1,820, all with a Buy view.
What is the HDFC Bank target price?
Ans. Systematix has Rs 870, Jefferies has Rs 880 and Nirmal Bang has Rs 1,020, which shows a wide range of views.
What are the main risks for bank stocks now?
Ans. Margin pressure from FCNR(B) deposits, lower treasury income, higher credit costs at some banks and a market where bank stocks are down by up to 29% this year.
Is this article investment advice?
Ans. No. It is educational and not a recommendation to buy or sell.
