visimoney
TLDR: HDFC Bank, ICICI, Axis, Kotak Bank shares volatile as Q3 results reflect margin pressures; here’s why banks are falling
Shares of HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank have witnessed volatility as their Q3 results reflect margin pressures. These lenders have faced challenges in mobilizing low-cost deposits to meet credit growth. The declining margins are expected to continue under pressure for the next few quarters, leading to a moderation of future earnings expectations. Despite the sell-off in bank stocks, valuations are not expensive. HDFC Bank saw a 15% slide in five sessions after reporting Q3 results, while ICICI Bank, Axis Bank, and Kotak Mahindra Bank delivered good quarters. The deposit growth for these banks has lagged behind credit growth, increasing the cost of funds. Analysts believe that while sectors such as wholesale deposits may experience some pressure on margins in the short term, strategic measures and focus on loan-to-deposit ratio will support growth.
Key Points:
- HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank Q3 results reflect margin pressures.
- Declining margins are expected to continue under pressure for the next few quarters, affecting future earnings
