'HDFC bank and Kotak bank will outperform in Q3'

NEW DELHI: Axis Bank posted a net profit of Rs 5,329 crore and an NII (net interest income) of Rs 10,360 crore in the September quarter. How are other banks going to perform in Q3? Market expert Rahul Malani shares his analysis with ET Now.

Overall, ICICI Bank 's financial performance appears to be favorable, as they reported results that exceeded expectations.

The beat was primarily due to an expansion in net interest margin security(NIMS). The bank has also scaled up its contingent provisions, which is a positive sign. However, deposit mobilization has moderated both year-over-year and quarter-over-quarter. This means that deposit mobilization and operating leverage will be key areas to watch, as the bank's strong performance in recent years will not guarantee growth in the coming quarters.

Which banks are likely to have large stock market gains in the near future?

In the last few years, we have seen ICICI bank perform well in terms of private banks . So in the next two years cycles, we believe that HDFC bank and Kotak bank will be the next big banks. Kotak bank will outperform. The HDFC bank would almost certainly be re-rated as well. Additionally, the earnings trajectory has remained somewhat consistent in Kotak Bank as well. Stock prices will outperform because they both underperformed in the previous two to three years. ICICI Bank is therefore likely to deliver market returns; however, additional outperformance is not anticipated. The same is true for PSU banks. Top-tier PSUs will produce market returns, but lower-tier PSU banks like Bank of India and Punjab National Bank will perform better.

Source: ET Now