Stocks to buy for long-term: ICICI Bank, HDFC Bank, SBI among Axis Securities' banking stock picks after Q4 results 2025

Mint

27-05-2025

The Q4 results of the private banks as well as state-run lenders were mixed with net interest margins surprising positively for larger banks, but growth remaining elusive. Banks delivered a credit growth of 11% year-on-year (YoY).
Slower credit growth versus Street expectations was primarily visible amongst the larger private banks, while most mid-sized banks delivered steady in-line growth. Credit growth was mainly driven by the Retail and SME segments, while corporate loans growth was visible mainly amongst PSU Banks. Private banks pointed to intense competitive pricing in the segment, thereby keeping growth muted, according to Axis Securities.
Banks' deposit growth during the quarter was broadly in line with credit growth, with the brokerage firm's coverage banks delivering a deposit growth of 12% YoY in FY25. The seasonal strength in CASA Deposits was visible during the quarter, with most banks reporting improved CASA Ratios.
NIMs for larger banks surprised positively and improved QoQ, while most mid-sized banks reported steady to marginally lower margins. However, for small finance banks (SFBs) and banks with higher MFI exposure, NIMs continued to contract meaningfully. The stress in the unsecured portfolios continued to keep slippages elevated, said Axis Securities.
Axis Securities has recommended four banking stocks to buy after Q4 results 2025. These banking stock picks are ICICI Bank, HDFC Bank, State Bank of India (SBI) and City Union Bank.
Here are banking stocks to buy after Q4 results 2025:
ICICI Bank has continued to report consistent performance across metrics, demonstrating healthy credit growth, healthy margins, and robust asset quality, said the brokerage firm. ICICI Bank stock remains Axis Securities' most preferred pick amongst the banks.
It has ICICI Bank share price target of ₹ 1,650 apiece, with a 'Buy' rating on the stock.
Axis Securities believes HDFC Bank's margins will continue to operate in the range of 3.4% - 3.5% over FY26-27E. HDFC Bank is expected to deliver a steady 13% and 18% CAGR advances and deposits growth over FY25-27E, driving LDR improvement to ~88% by FY27E. RoA is expected to bounce back to historical levels ranging between 1.9% - 2.1%.
Axis Securities has a 'Buy' call on HDFC Bank shares, with a target price of ₹ 2,250 per share.
SBI's corporate loan growth in FY26 is expected to be healthy at 12-13%. According to Axis Securities, SBI remains well-poised to sustain its growth momentum, supported by its comfortable LDR, which provides it with levers to accelerate credit growth. It expects SBI's RoA and RoE to range between 1% and 14-15% over FY26-27E.
It has a 'Buy' rating on SBI shares, with a target price of ₹ 1,025 apiece.
The brokerage firm expects City Union Bank to deliver consistent RoA and RoE of 1.5% - 1.6% and 12% - 14% over FY26-27E, despite higher Opex ratios, and supported by strengthening fee income, steady NIMs and controlled credit costs. It recommends buying City Union Bank shares for a target price of ₹ 225 apiece.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.