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  • Writer's pictureMorning Sun Time
    • Jan 23
    • 3 min read

ICICI Bank vs HDFC Bank Stock comparison: Comparing ICICI Bank and HDFC Bank: Which Stock is a 'Must-Have'? Share Price Targets Revealed.

ICICI Bank vs HDFC Bank Stock comparison: InCred Equities stated that HDFC Bank is facing challenges with deposit growth and a weak Liquidity Coverage Ratio (LCR) of 110 per cent. The analysis suggests that if there is a potential deposit rate hike, ICICI Bank may need to follow suit to maintain its market share.

ICICI Bank vs HDFC Bank Stock comparison

Summary

  • HDFC Bank and ICICI Bank have comparable positions on the margins front.

  • HDFC Bank is facing challenges with deposit growth and a weak Liquidity Coverage Ratio (LCR).

  • Analysts suggest that ICICI Bank may withstand challenges with steady earnings.


Most analysts monitoring ICICI Bank and HDFC Bank hold positive views on the two private lenders. However, a couple of brokerages favor ICICI Bank over HDFC Bank. Despite HDFC Bank's reasonable valuations, some analysts express concerns about merger-related uncertainty for HDFC Bank and believe that ICICI Bank represents the lowest-risk investment in the context of domestic macros.


Advantages of Choosing HDFC Bank

 

InCred Equities highlighted the challenges faced by HDFC Bank in terms of deposit growth and a weak Liquidity Coverage Ratio (LCR) at 110 percent. The firm suggested that if HDFC Bank opts for a deposit rate hike, ICICI Bank may need to follow suit to safeguard its market share. In addition, InCred Equities noted that HDFC Bank holds an advantage over ICICI Bank in terms of access to unsecured retail and SME/MSME loans due to a broader branch network and improved rural/semi-urban reach.


Despite both banks being in similar positions regarding margins, InCred Equities anticipates that HDFC Bank could benefit from improving operating leverage. This improvement is expected to be driven by the growth in the size of large-ticket mortgage loans, resulting in lower operating expenses for HDFC Bank.


Therefore, considering a comparable asset quality profile, HDFC Bank is in a more favorable position than ICICI Bank in terms of growth (attributed to enhanced reach) and profitability (due to improved operating leverage). The expectation is that HDFC Bank will achieve a 26.1 percent Compound Annual Growth Rate (CAGR) in Profit After Tax (PAT) from FY23F to FY26F, surpassing ICICI Bank's anticipated 15.9 percent.


Advantages of Choosing ICICI Bank

 

According to Nuvama, ICICI Bank has consistently achieved well-rounded and detailed growth in the past two years. With a robust balance sheet, a net interest margin (**NIM**) exceeding expectations, and ample liquidity, Nuvama anticipates that ICICI Bank's loan growth in FY25 will surpass that of HDFC Bank, and its Return on Assets (RoA) will continue to outperform other major banks.


In an industry facing limitations in terms of deposits, it is asserted that ICICI Bank emerges as a "must-have stock" and represents the lowest-risk investment in the Indian macro environment, without experiencing the quarterly anomalies reported by other major banks. The statement suggests that the current 10 percent premium at which the stock trades compared to HDFC Bank is reasonable, considering the relative earnings performance of the two banks.



Elara Securities suggests that despite challenges in the banking sector, ICICI Bank stands resilient with consistent earnings. Due to uncertainties related to mergers affecting HDFC Bank, ICICI Bank is considered a reliable option with a best-in-class Return on Assets (RoA). The return on risk-weighted assets for ICICI Bank has significantly improved, surpassing that of HDFC Bank. The recommendation is to maintain a BUY position with a revised target of Rs 1,214 (previously Rs 1,192) as of September 2025E. ICICI Bank is emphasized as the top pick in the sector by Elara Securities.


Nomura India and Motilal Oswal Securities have both chosen ICICI Bank as their preferred banking option.


Kotak expressed some disappointment in the price performance of ICICI Bank, despite the bank consistently delivering strong earnings. The challenge, according to Kotak, is relative in nature. ICICI Bank is currently trading at peak valuation within their coverage universe, though not in comparison to its historical performance among large banks. Kotak mentioned that for ICICI Bank to justify its higher valuation, it would need to consistently deliver superior returns that are sustainable in the medium term. Despite this, ICICI Bank remains one of Kotak's top picks.


Projected Stock Prices

 

Trendlyne recommends an average target price of Rs 1,210 for ICICI Bank, indicating a potential upside of 16 percent. In comparison, HDFC Bank's average target price of Rs 1,966 suggests a more substantial upside of 35 percent.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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