In the current volatile times, where most investors are looking for safe bets, the banking stocks do present a growth supportive opportunity amidst tariff driven uncertainties. Two key private sector banks, HDFC Bank and ICICI Bank are in focus ahead of their earnings on April 19. In fact, the Nifty Bank Index was one of the top sectoral gainers and HDFC Bank among the top performing stocks.
Here is an analysis of the two major private sectors banks and how the valuations stack up at the current juncture ahead of earnings.
HDFC Bank Vs ICICI Bank: Share price
The HDFC Bank shares closed Friday- April 11 session up over 2%. The share price has gained nearly 6% in last 1 month but up just 1% in 2025 so far as prices dipped to as low as Rs 1,629 a share on January 27 and then again recouped its losses. The share price of HDFC Bank is currently close to its 52-week high of Rs 1,880 a share. Over a 1-year time frame HDFC Bank is up 20%.
Meanwhile ICICI Bank shares closed in the green, up under 1% on Friday (April 11). Over 1 year, it has delivered similar gains as HDFC Bank, up 21%. The gains over 1 month is about 5% while the 2025 chart thus far shows an upward trajectory with 2% gains so far in 2025. This is because the share price has seen striking price moves, from lows of Rs 1,196/share in January to highs of Rs 1,356 per share in March. Its 52-week high is at Rs 1,373 per share and the 52-week low is at Rs 1,048 per share.
HDFC Bank Vs ICICI Bank: Q4 expectations
Both the banks are set to announce their Q4 earnings on April 19. Overall most brokerage reports indicate that the margin impact due to repo rate cuts are going to be sporadic and partly offset by benefits from CRR cut and the MCLR repricing. While the QoQ margin decline may be around 5-10 bps, asset quality is expected to hold up. As per a host of brokerage reports, most large cap banks like HDFC Bank, ICICI Bank with a strong liability franchise and levers to offset margin compression are expected to put up a good show.
HDFC Bank may post about 2% jump in Q4FY25 NII sequentially and between 7-8% on a year-on-year basis. Margins may dip slightly but profitability is expected to remain intact the Q4 PAT as per most estimates is seen in the mid-single digits.
ICICI Bank’s Q4 performance is also expected to be on similar lines with NII growth hovering around 2-3% QoQ. However, on a year-on-year comparsion ICICI Bank may show a higher NII jump but profitability is expected to be similar around 5%. The margin dip for ICICI Bank may be slightly deeper.
HDFC Bank Vs ICICI Bank: Q4 business update, Q3 earnings
A look now at the Q4 business updates reported by both banks. HDFC Bank’s Q4 advances grew 7.7% YoY while deposits rose 7.7% YoY. Even compared to Q3FY25, the private sector bank major clocked 3% growth in advances and 5% jump in deposits.
ICICI Bank’s Q4 business update details are not out but the country’s largest private sector bank clocked 16% profit growth and posted stable margins of 4.25% in Q3FY25. The NPAs declined to 1.96% in Q3 and robust retail loan growth and improved margins continue to be the highlight of the bank’s quarterly progress.
HDFC Bank Vs ICICI Bank: Dividend payout
A look at the dividend history of both banks now-
HDFC Bank has declared dividend worth Rs 19.50 per share in last 1 year and has declared 23 dividends since April 30, 2003. Its dividend yield is 1.08% at current levels and the bank has declared annual dividend every year since 2016, barring 2020.
ICICI Bank has declared 22 dividends since February 21, 2002. The bank has announced a final dividend every year in the past 5 years. In the last 1 year, it has declared total dividend of Rs 10 per share and at the current levels, its dividend yield is 0.76%.
HDFC Bank Vs ICICI Bank: Valuation metrics
The HDFC Bank share has a relatively high FII holding at 48.3%. The price-to-earnings ratio is at 19.83 and the EPS is at 86.57. The Bank’s Return on Equity is at 14.39%. This is lower than the industry median. Its price to book ratio at 2.9 in relatively high compared to industry average. The stock price recently crossed its 200-day moving average on March 12.
Focus now on the ICICI Bank share price. In comparison, it has a price to earnings ratio of 20.44. The price to book ratio is higher than industry average at 3.57 and the share price has a return on equity of 17.46. This is higher than industry average. FIIs hold 45.7% stake in the company.
HDFC Bank Vs ICICI Bank: Company profiles
Headquartered in Mumbai, HDFC Bank is one of the largest private sector banks in India. It was started on August 30, 1994 by Housing Development Finance Corporation and is engaged in retail banking, wholesale banking and treasury operations. In July 2003, HDFC Limited merged with HDFC Bank, the Bank became promoter of the Company, in place of HDFC. The merger ratio was 42:25.
ICICI Bank is India’s largest private sector bank and it was incorporated in January, 1994. The bank offers a wide range services across the banking and financial universe including commercial banking and treasury operations. It as branches in Bahrain, China, Dubai, Hong Kong, Singapore, United States of America. Among key mergers and acquisitions, ICICI Bank took over Bank of Madura in 2001in an all-stock merger.
HDFC Bank Vs ICICI Bank: Brokerage views
Both ICICI Bank and HDFC Bank feature among the top picks in the financial space for key brokerages like Motilal Oswal, Nomura and Goldman Sachs.
In conclusion, the list of banking stocks in India is long. Before you decide which to add to your watchlist be sure to do your homework and chart out your investment goals.