ICICI and HDFC Bank share prices hit new highs after strong March quarter earnings

ICICI and HDFC Bank shares surged to new record highs on Monday, following the release of their strong earnings for the March quarter. Both banks exceeded analysts' expectations, with ICICI Bank reporting a 15.7% increase in its net profit, while HDFC Bank posted a 7% year-on-year growth in profits. These positive earnings have resulted in a boost to investor confidence, leading to significant gains in both banks' stock prices.

ICICI Bank's strong performance

ICICI Bank's shares saw an increase of over 2% on Monday after the bank reported a 15.7% rise in its consolidated net profit for the March quarter, which reached ₹13,502 crore. This positive financial performance led the stock to hit a new 52-week high of ₹1,437 on the BSE, rising by 2.15%. On the NSE, the stock also climbed by 2.08% to ₹1,436.

The strong earnings were driven by an 18% increase in the bank's net profit for Q4 FY25, which reached ₹12,630 crore, compared to ₹10,708 crore during the same period last year. ICICI Bank also saw a growth in its core net interest income, which rose by 11% to ₹21,193 crore. Additionally, non-interest income (excluding treasury) grew by 18.4%, reaching ₹7,021 crore.

The bank's asset quality improved as well, with gross non-performing assets (NPAs) falling to 1.67% in March 2025, down from 1.96% in December 2024. This indicates that ICICI Bank is effectively managing its loans and reducing bad debts, further boosting investor confidence.

Shares of HDFC Bank also rose by more than 2% on Monday, reaching a one-year high of ₹1,950 on both the BSE and NSE. This was after the bank reported a 7% increase in its consolidated net profit for the March quarter, which totaled ₹18,835 crore.

On a standalone basis, HDFC Bank's net profit stood at ₹17,616 crore, up from ₹16,512 crore during the same period last year. The bank's net interest income increased by 10.3%, reaching ₹32,070 crore. This growth was supported by a slight increase in the bank's net interest margin, which rose to 3.5%, and a 5.4% growth in gross advances.

However, HDFC Bank also raised concerns about the pricing pressure it faced in home and corporate loans, which affected its loan growth. The bank's Chief Financial Officer, Srinivasan Vaidyanathan, mentioned that HDFC Bank chose to moderate its loan expansion in favor of focusing on deposit growth. As a result, the bank's deposits grew by over 15% during the fiscal year.

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Broader market impact

Both ICICI Bank and HDFC Bank's strong performances have contributed to a positive outlook for the banking sector in India. The Nifty Bank Index, which tracks the performance of major private-sector banks, rose by 1.9% on Monday, surpassing its previous peak set in September. The index has seen a rise of over 7% since April 2, outperforming the broader Nifty 50 Index, which has gained just over 3% during the same period.

Analysts believe that Indian banks are largely insulated from global trade tensions, given their limited international exposure. Additionally, many banks, including ICICI and HDFC Bank, are benefiting from solid fundamentals, which include strong capital adequacy ratios and accelerating growth prospects as liquidity improves and monetary policy eases.

Brokerage firm Motilal Oswal Financial Services Ltd. has revised its earnings estimates for HDFC Bank for FY26, increasing the bank's price target by 3%. It also raised ICICI Bank’s price target by 3% to ₹1,650. This shows that analysts remain optimistic about the future prospects of both banks, driven by strong financial performance and a favorable banking environment.

As the market reacts to the positive earnings reports from ICICI and HDFC Bank, investor sentiment remains bullish, and both banks are likely to continue benefiting from a favorable economic and financial climate.

In conclusion, ICICI and HDFC Bank's strong earnings have boosted their share prices to new record highs. With improving asset quality, solid financial growth, and strong capital buffers, both banks are well-positioned to maintain their growth trajectory. Investors remain confident in the outlook for Indian banks, especially given their limited exposure to global trade risks and the ongoing improvements in the domestic banking sector.