Q2 business updates: Private lenders like HDFC Bank, Axis Bank, Yes, IDBI Bank, IndusInd Bank, Kotak Mahindra Bank have already released their second-quarter business updates ahead of announcing their full Q2 FY27 financial results.
Market investors may be wondering whether now is the right time to invest in private-sector banking stocks. According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, evaluating banking stocks after the Q2 FY27 business updates requires looking closely at deposit mobilization, credit expansion, and structural adaptations like the Reserve Bank of India’s FCNR(B) swap facility across major financial institutions.
Experts also assess which banking stocks could be worth considering ahead of the Q2 results season.
Q2 business updates FY27 review
HDFC Bank
The bank showed robust period-end deposit growth of 18.8% year-on-year, reaching ₹33,275 billion, alongside gross advances growth of 16.3% year-on-year, touching ₹32,195 billion. The bank effectively leveraged its market scale by mobilizing $11.5 billion in foreign currency non-resident deposits, maintaining healthy balance sheet momentum and steady granular deposit acquisition.
Axis Bank
Axis Bank delivered strong momentum with gross advances growing 22.7% year-on-year to ₹13,846 billion and total deposits rising 20.7% year-on-year to ₹14,521 billion. Even when excluding FCNR(B)-backed leverage operations, Axis Bank’s core gross advances expanded by a solid 18.8% year-on-year.
Yes Bank
Yes Bank demonstrated healthy business traction as net advances expanded 23.8% year-on-year to ₹309,675 crore and deposits grew 19.5% year-on-year to ₹354,084 crore. Yes Bank’s normalized advances growth stood at 17.7% year-on-year, with its credit-to-deposit ratio improving to a healthier 87.5%.
Kotak Mahindra Bank
Kotak Mahindra Bank displayed aggressive expansion, reporting a net advances surge of 24.7% year-on-year to ₹5,77,094 crore and total deposit growth of 23.2% year-on-year to ₹6,51,491 crore, bolstered significantly by $5.78 billion in FCNR(B) inflows.
IDBI Bank
IDBI Bank recorded steady, broad-based growth, with total business crossing ₹6.27 lakh crore representing an 18% year-on-year increase, net advances reaching ₹2,71,537 crore up 18% year-on-year, and total deposits expanding 17% year-on-year to ₹355,611 crore.
IndusInd Bank
IndusInd Bank reported more moderate metrics, with net advances moving up 11.2% year-on-year to ₹3,62,393 crore and deposits rising 10.1% year-on-year to ₹4,29,038 crore. However, its CASA ratio moderated to 28.0%, reflecting ongoing industry-wide pressure on low-cost liability mobilization.
Which banking stock to buy ahead of Q2 results FY27?
Srivastava recommended long-term investors should aim for compounding, stability, and lower portfolio volatility should note that large-cap private sector heavyweights remain fundamentally superior.
She added that HDFC Bank stands out as the primary compounder for long-term holding. Its massive liability franchise and continuous deposit outperformance provide structural insulation against broader liquidity squeezes.
“Simultaneously, Kotak Mahindra Bank and Axis Bank offer aggressive growth profiles backed by high-quality capital adequacy, making them strong alternatives for long-term capital appreciation. Conversely, mid-tier and turnaround candidates carry higher execution or asset-quality risks over extended horizons compared to these top-tier institutional compounders,” she added.
Meanwhile, Sugandha Sachdeva, Founder of SS WealthStreet, while picking Kotak Mahindra Bank as the top stock to buy, said that the stock is looking constructive following its Q2 FY27 business update, with the stock witnessing a strong rebound from lower levels on healthy volumes.
Sachdeva explained that the the stock is sustaining above its key moving averages and continues to form a higher-high, higher-low structure, indicating improving momentum. The recent rise has also been accompanied by strong volumes, adding conviction to the recovery.
On the technical outlook, she added, “In the short term, the stock appears to have established a base around Rs.386, while from a medium-term perspective, Rs.350 remains a stronger structural support zone. As long as these levels hold, the broader trend remains positive.
On the upside, the stock has the potential to retest the Rs.460 zone, which is close to its previous lifetime-high region. A decisive breakout above Rs.460 could open the way for a further move towards Rs.505-525 over the medium to long term.”
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
