HDFC & Kotak Shine, IndusInd Stumbles: Key Takeaways from Q2 Private Bank Results

Mumbai | October 27

India’s top private sector banks reported a mixed set of earnings for the September quarter (Q2FY26), highlighting the balance between credit growth and margin pressures. While HDFC Bank and ICICI Bank posted strong performances backed by healthy loan growth and asset quality, Kotak Mahindra Bank delivered a steady quarter, and IndusInd Bank lagged due to elevated provisions and higher costs.

HDFC Bank: Margins Stabilise, Profits Steady

As India’s largest private lender, HDFC Bank continued to hold its leadership despite margin compression. Its net interest margin (NIM) on interest-earning assets was 3.4% in Q2FY26, versus 3.7% a year ago. The bank’s advances stood at ₹27.46 lakh crore, up 10% YoY, supported by healthy growth in corporate and SME segments.

The advances-to-deposit ratio remained high at over 90%, leading the bank to remain cautious on aggressive loan growth. Provisions rose to ₹3,500 crore, compared with ₹2,700 crore in the same quarter last year. These included floating and general provisions, reflecting a conservative stance amid macro uncertainty.

HDFC Bank’s standalone net profit rose 10.8% YoY to ₹18,641 crore, while its net NPA ratio stood at 0.42% versus 0.41% a year earlier.

PL Capital maintained a ‘BUY’ rating with a target price of ₹1,150, terming the quarter “resilient yet provision-heavy,” and noting that NIMs likely bottomed out in Q2. The brokerage expects a recovery in H2FY26 led by stabilising deposit costs and better credit growth traction.

Read the Full Report on HDFC Bank Q2FY26 Results Here

ICICI Bank: Retail Momentum and Operational Strength

ICICI Bank reported a 5.2% year-on-year rise in standalone net profit to ₹12,358.9 crore for the July–September quarter (Q2 FY26), comfortably beating Street expectations of ₹12,024 crore. The performance was underpinned by higher core income and sustained asset quality gains.

The lender’s net interest income (NII) grew 7.4% YoY to ₹21,529.5 crore, slightly above consensus, as loan growth and improved mix offset modest pressure on spreads. Total income rose to ₹49,333.5 crore from ₹47,714 crore last year, while other income climbed to ₹7,575.5 crore from ₹7,176.7 crore.

Asset quality continued to improve, with gross NPAs down to ₹23,849.7 crore (1.58%) from ₹27,121.2 crore (1.97%) a year earlier. Net NPAs stood at ₹5,827 crore, or 0.39% of advances, improving from 0.42% a year ago. Provisions declined 26% YoY to ₹914 crore, reflecting the bank’s robust credit profile and recoveries.

ICICI Bank’s capital adequacy ratio strengthened to 15.76%, while return on assets (RoA) remained stable at 2.36%. Net worth climbed to ₹3.02 lakh crore, from ₹2.50 lakh crore a year earlier.

PL Capital reaffirmed its ‘BUY’ rating with a higher target price of ₹1,800, calling the quarter “steady and broad-based,” driven by consistent profitability and prudent risk management.

Read the Full Report on ICICI Bank Q2FY26 Results Here

Kotak Mahindra Bank: Margins Hold Firm, Treasury Weighs on Profit

Kotak Mahindra Bank faced margin and provisioning pressure in Q2FY26, with its NIM slipping to 4.54%, down from 4.91% a year earlier. The lender reported standalone advances growth of 15.8% YoY to ₹4.62 lakh crore, driven by home loans, loans against property, and consumer durable financing.

The central bank’s June 2025 repo rate cut created a temporary mismatch — lending rates dropped faster than deposit costs — compressing margins across the system.

Kotak’s provisions surged 43.5% YoY to ₹947.4 crore, largely due to the RBI’s directive on Alternate Investment Fund (AIF) exposures. Despite this, net NPAs fell to 0.32%, down from 0.43% a year earlier.

However, higher provisioning pulled net profit down 2.7% YoY to ₹3,253 crore. The bank’s CET-1 ratio of 21% remains among the highest in the sector, offering ample capital flexibility.

PL Capital maintained a ‘HOLD’ rating with a target price of ₹2,070, describing the quarter as “muted but disciplined,” while pointing to Kotak’s strong liability profile and conservative lending approach as key long-term positives.

Read the Full Report on Kotak Mahindra Bank Q2FY26 Results Here