(Reuters) -India’s top private lenders ICICI Bank and HDFC Bank opened at record high levels on Monday, after their fourth-quarter results inspired confidence in the companies’ ability to deliver strong loan growth and maintain healthy asset quality.
Both lenders reported quarterly results above analyst estimates on Saturday, driven by sustained loan growth and improving asset quality.
Shares of HDFC Bank and ICICI Bank were up 1.3% and 0.9%, respectively, as of 9:40 a.m. IST. The banks index and private banks index gained about 2% each.
The two banks’ gains drove the blue-chip Nifty 50 0.6% higher, with the heaviest-weighted HDFC Bank becoming the index’s top boost on the day.
ICICI Bank, which reported a record quarterly profit of 126.30 billion rupees ($1.48 billion), was set for its seventh straight session of gains, while HDFC Bank was on track for its fifth.
HDFC Bank expects its loan growth to be above that of the industry in fiscal 2027, chief financial officer Srinivasan Vaidyanathan said in a post-earnings call without divulging specific targets.
The two are Jefferies’ top picks in the sector, with analysts highlighting their ability to expand lending margins while maintaining credit costs.
At least 16 analysts, including Jefferies, hiked their price targets after results, per data compiled by LSEG. This lifted the median price targets of ICICI Bank and HDFC Bank to 1,600 rupees and 2,120 rupees, respectively, from 1,495 rupees and 1,970 rupees last month.
Analysts at Emkay Global said HDFC Bank would be a key beneficiary of easing regulatory stance on loan-to-deposit ratio and liquidity, which should reflect as better loan growth this fiscal.
This will reduce the bank’s growth gap with peers and thus ease investor concern, they added.
Smaller private lender Yes Bank jumped nearly 5% after posting a quarterly profit beat. The lender expects to deliver loan growth of 12-15% in the fiscal year, CEO Prashant Kumar said.
($1 = 85.1310 Indian rupees)
(Reporting by Kashish Tandon and Ashish Chandra in Bengaluru; Editing by Janane Venkatraman)
