Bank Giants Diverge on Q1 Updates: HDFC and Axis Banks Surge as Kotak Mahindra Posts Moderation
The banking sector witnessed mixed sentiment trading after major private lenders released their business updates for the April-June quarter. Shares of HDFC Bank and Axis Bank saw significant rises, driven by strong growth in advances and deposits. Conversely, Kotak Mahindra Bank’s stock fell sharply as it reported a sequential moderation across loan and deposit growth metrics.Growth Trajectory: Strong Performance from HDFC Bank and Axis Bank
HDFC Bank, India's largest private lender, reported robust Q1 results. Gross advances grew 15.4% year-on-year, reaching ₹30.6 lakh crore as of June 30. Total deposits for the quarter climbed 14.7% to ₹31.71 lakh crore, demonstrating strong customer trust.Axis Bank also posted impressive growth figures in the period. Gross advances expanded by 18.8% year-on-year, hitting ₹12.73 lakh crore. Total deposits surged by 18.2%, reaching ₹13.73 lakh crore. Notably, CASA deposits grew 11.4% to ₹5.22 lakh crore, while term deposits saw a jump of 22.8% to ₹8.51 lakh crore.
Kotak Mahindra Bank Faces Investor Concern Amid Moderated Growth
In contrast, Kotak Mahindra Bank's stock traded down sharply after releasing its Q1 figures. The bank reported that net advances rose 15.1% on year, amounting to ₹5.12 lakh crore by June 30. Total deposits grew nearly 12% year-on-year, standing at ₹5.73 lakh crore.The lender noted specific growth in its current account savings accounts, which expanded by 10.2% and reached INR 2.31 trillion as of the end of June. However, shares of Kotak Mahindra Bank were trading 3.7% lower apiece following the sequential moderation observed in both loan and deposit growth rates.
Market Reaction and Analyst Vigilance Across the Sector
The broader market reacted positively to strong performances by several institutions. At 10:40 am on July 6, Bank Nifty was trading 0.6% higher at 58,262. HDFC Bank led the sector gains, rising 2.6%, while AU Small Finance Bank climbed 2.1%.A senior research analyst at CLSA noted that most banks reporting provisional Q1 numbers met or exceeded their estimates, excluding Kotak and RBL in particular. The analyst stressed the need for continued vigilance regarding loan book expansion granularity across the banking industry. Furthermore, they pointed to the potential impact of declining CASA ratios on future margins as a key factor to watch.
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