'Reaping the rewards': Why short-term investors leaning towards ICICI Bank over HDFC Bank? Key reasons explained
ICICI Bank
in the private banking space, thanks to its solid June quarter results. With strong profit growth and steady margins, ICICI is currently edging out rival
HDFC Bank
in investor preference.
HDFC Bank is currently dealing with various post-merger issues, notably an elevated credit-deposit (CD) ratio, which has affected investor confidence. The high CD ratio indicates that deposit growth is not keeping pace with credit expansion.
Despite both institutions maintaining premier banking networks across India, analysts note ICICI's current advantageous position.
"ICICI Bank is reaping the rewards of a well-executed transformation, showing clarity and consistency, while HDFC Bank navigates a transitional phase post-merger," Shrikant Chouhan, head, equity research, Kotak Securities told ET.
Following its June quarter results and weekend announcements regarding dividend and bonus issue, HDFC Bank shares increased by over 2% on Monday.
ICICI Bank shares rose nearly 3% after reporting healthy profit growth, supported by stable net interest margins and robust asset quality. HDFC Bank's performance has raised some concerns.
Post-merger, with its CD ratio remaining in the 90s, the bank faces difficulties in efficient liquidity deployment, affecting immediate loan growth and NIMs.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Many Are Watching Tariffs - Few Are Watching What Nvidia Just Launched
Seeking Alpha
Read More
Undo
ICICI Bank's superior near-term earnings visibility makes it more attractive to short-term investors.
"ICICI Bank seems to be a preferred pick with its robust asset quality, strong capital position and sustained profitability momentum," Prashanth Tapse, senior VP (research), Mehta Equities told ET.
Regarding HDFC Bank, Tapse notes that the stock's underperformance is likely to continue due to valuation adjustments and subdued post-merger earnings.
Although ICICI Bank is currently preferred, analysts maintain close observation of HDFC Bank. The institution has projected to surpass industry growth in FY27 earnings and match industry performance in FY26.
For short to medium-term investors seeking stability and earnings visibility, ICICI Bank remains the preferred choice, according to market experts. However, for long-term bets, HDFC Bank may gain favour, once there's more clarity on its post-merger growth trajectory and how it stacks up against ICICI Bank.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Two M'Belle directors fined Rs 1cr each by Sebi
Mumbai: A special court convicted Gopu Parimal Belani and Anupama Motwani, directors of M'Belle International Pvt Ltd, a fashion accessories company, and fined them Rs 1 crore each for failing to deposit a Sebi penalty of Rs 1 crore imposed in 2004. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
an hour ago
- Time of India
PhysicsWallah's IPO gets nod from Sebi
MUMBAI: PhysicsWallah has received Sebi's nod for its IPO, a notification by the markets regulator showed. The edtech unicorn had filed draft IPO papers through the confidential route in March. The company's targeted about Rs 4,600 crore IPO will comprise a mix of fresh issue of shares and an offer for sale (OFS) component. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
Trump's order to block 'woke' AI spurs tech giants to censor their chatbots
Tech companies looking to sell their artificial intelligence technology to the federal government must now contend with a new regulatory hurdle: proving their chatbots aren't woke. President Donald Trump's sweeping new plan to counter China in achieving global dominance in AI promises to cut regulations and cement American values into the AI tools increasingly used at work and home. But one of Trump's three AI executive orders signed Wednesday the one preventing woke AI in the federal government marks the first time the US government has explicitly tried to shape the ideological behavior of AI. Several leading providers of the AI language models targeted by the order products like Google's Gemini and Microsoft's Copilot have so far been silent on Trump's anti-woke directive, which still faces a study period before it gets into official procurement rules. While the tech industry has largely welcomed Trump's broader AI plans, the anti-woke order forces the industry to leap into a culture war battle or try their best to quietly avoid it. It will have massive influence in the industry right now, especially as tech companies are already capitulating to other Trump administration directives, said civil rights advocate Alejandra Montoya-Boyer, senior director of The Leadership Conference's Center for Civil Rights and Technology. The move also pushes the tech industry to abandon years of work to combat the pervasive forms of racial and gender bias that studies and real-world examples have shown to be baked into AI systems. First off, there's no such thing as woke AI, Montoya-Boyer said. There's AI technology that discriminates and then there's AI technology that actually works for all people. Molding the behaviors of AI large language models is challenging because of the way they're built and the inherent randomness of what they produce. They've been trained on most of what's on the internet, reflecting the biases of all the people who've posted commentary, edited a Wikipedia entry or shared images online. This will be extremely difficult for tech companies to comply with, said former Biden official Jim Secreto, who was deputy chief of staff to US Secretary of Commerce Gina Raimondo, an architect of many of Biden's AI industry initiatives. Large language models reflect the data they're trained on, including all the contradictions and biases in human language. Tech workers also have a say in how they're designed, from the global workforce of annotators who check their responses to the Silicon Valley engineers who craft the instructions for how they interact with people. Trump's order targets those top-down efforts at tech companies to incorporate what it calls the destructive ideology of diversity, equity and inclusion into AI models, including concepts like critical race theory, transgenderism, unconscious bias, intersectionality, and systemic racism. The directive has invited comparison to China's heavier-handed efforts to ensure that generative AI tools reflect the core values of the ruling Communist Party. Secreto said the order resembles China's playbook in using the power of the state to stamp out what it sees as disfavored viewpoints." The method is different, with China relying on direct regulation by auditing AI models, approving them before they are deployed and requiring them to filter out banned content such as the bloody Tiananmen Square crackdown on pro-democracy protests in 1989. Trump's order doesn't call for any such filters, relying on tech companies to instead show that their technology is ideologically neutral by disclosing some of the internal policies that guide the chatbots. The Trump administration is taking a softer but still coercive route by using federal contracts as leverage, Secreto said. That creates strong pressure for companies to self-censor in order to stay in the government's good graces and keep the money flowing. The order's call for truth-seeking AI echoes the language of the president's one-time ally and adviser Elon Musk, who has made it the mission of the Grok chatbot made by his company xAI. But whether Grok or its rivals will be favored under the new policy remains to be seen. Despite a rhetorically pointed introduction laying out the Trump administration's problems with DEI, the actual language of the order's directives shouldn't be hard for tech companies to comply with, said Neil Chilson, a Republican former chief technologist for the Federal Trade Commission. It doesn't even prohibit an ideological agenda, just that any intentional methods to guide the model be disclosed, said Chilson, head of AI policy at the nonprofit Abundance Institute. Which is pretty light touch, frankly. Chilson disputes comparisons to China's cruder modes of AI censorship. There is nothing in this order that says that companies have to produce or cannot produce certain types of output, he said. It says developers shall not intentionally encode partisan or ideological judgments. With their AI tools already widely used in the federal government, tech companies have reacted cautiously. OpenAI on Thursday said it is awaiting more detailed guidance but believes its work to make ChatGPT objective already makes the technology consistent with Trump's directive. Microsoft, a major supplier of online services to the government, declined to comment. Musk's xAI, through spokesperson Katie Miller, a former Trump official, pointed to a company comment praising Trump's AI announcements but didn't address the procurement order. xAI recently announced it was awarded a US defense contract for up to $200 million, just days after Grok publicly posted a barrage of antisemitic commentary that praised Adolf Hitler. Anthropic, Google, Meta, and Palantir didn't respond to emailed requests for comment Thursday. The ideas behind the order have bubbled up for more than a year on the podcasts and social media feeds of Trump's top AI adviser David Sacks and other influential Silicon Valley venture capitalists, many of whom endorsed Trump's presidential campaign last year. Their ire centered on Google's February 2024 release of an AI image-generating tool that produced historically inaccurate images before the tech giant took down and fixed the product. Google later explained that the errors including generating portraits of Black, Asian and Native American men when asked to show American Founding Fathers were the result of an overcompensation for technology that, left to its own devices, was prone to favoring lighter-skinned people because of pervasive bias in the systems. Trump allies alleged that Google engineers were hard-coding their own social agenda into the product. It's 100 per cent intentional, said prominent venture capitalist and Trump adviser Marc Andreessen on a podcast in December. That's how you get Black George Washington at Google. There's override in the system that basically says, literally, Everybody has to be Black.' Boom. There's squads, large sets of people, at these companies who determine these policies and write them down and encode them into these systems. Sacks credited a conservative strategist who has fought DEI initiatives at colleges and workplaces for helping to draft the order. When they asked me how to define woke,' I said there's only one person to call: Chris Rufo. And now it's law: the federal government will not be buying WokeAI, Sacks wrote on X. Rufo responded that he helped identify DEI ideologies within the operating constitutions of these systems. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
