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The Bank Nifty index helped cushion the Nifty’s downside during the afternoon session on May 2, as investors booked profits across sectors after a sharp early rally. Shares of major banking names like HDFC Bank, ICICI Bank, State Bank of India (SBI), and Axis Bank rose between 0.2 percent and 1 percent in intraday trade.

The upmove in banking stocks came as investors remained optimistic about their March quarter performance. State-run lender SBI is scheduled to report its Q4FY25 earnings on May 3.

According to Moneycontrol's poll, SBI is expected to report a double-digit fall in profit or 13 percent YoY fall to Rs 17,971 crore in Q4FY25 due to lower treasury income, while revenue is expected to rise modestly by 5.3 percent YoY to Rs 43,872 crore.

: SBI Q4 Preview: Profit may fall in double-digits amid lower treasury income, margins to narrow

According to analysts at Kotak Institutional Equities, SBI’s net interest margins (NIMs) are expected to shrink by as much as 34 basis points on a yearly basis—from 3 percent in Q4FY24 to 2.6 percent in Q4FY25. The decline is attributed to higher funding costs and the recent trend of rate cuts.

Meanwhile, the Q4 results from leading private sector lenders—HDFC Bank, ICICI Bank, and Axis Bank—have so far received positive reactions from brokerages.

Brokerages have upgraded their outlook on HDFC Bank, citing robust asset quality, gains in deposit market share, and improvements in the loan-to-deposit ratio—a metric that had raised concerns following its merger with HDFC Ltd. Nuvama Institutional Equities raised its target price for HDFC Bank shares by 12.5 percent, from Rs 1,950 to Rs 2,195.

ICICI Bank’s consistent performance also drew praise, with both net interest income (NII) and net profit showing double-digit year-on-year growth in the fourth quarter. Asset quality improved as well. Several brokerages—CLSA, Jefferies, and Nomura, along with domestic firms like Nuvama and Motilal Oswal—revised their price targets upward. Jefferies gave the most optimistic target at Rs 1,710 per share.

Axis Bank delivered strong sequential growth in loans and deposits and reported better asset quality, although NII growth was subdued. ICICI Securities maintained its 'buy' rating on the stock, with a target price of Rs 1,400 per share.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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