The June 2025 quarter results for India’s top private sector banks—HDFC Bank, Kotak Mahindra Bank, and Axis Bank—reveal a competitive yet challenging environment, with all three grappling with margin pressures and changing regulatory dynamics. Here’s a head-to-head comparison of their key financial and operational metrics for Q1 FY26.
Net Interest Margin (NIM): Pressure Across the Board
- Kotak Mahindra Bank: NIM dropped to 4.65%, down from 5% a year ago.
- HDFC Bank: NIM stood at 3.5%, lower than 3.7% last year.
- Axis Bank: NIM slipped to 3.8% from 4.05% YoY.
The drop in margins reflects the impact of the RBI’s repo rate cut in June 2025. While loan yields corrected quickly, deposit rates are adjusting more gradually, pressuring spreads.
Loan Book Growth: Kotak Leads
- Kotak Mahindra Bank: Advances rose 14% YoY to ₹4.4 lakh crore.
- HDFC Bank: Advances grew 6.7% YoY to ₹26.28 lakh crore.
- Axis Bank: Advances increased 8% YoY to ₹10.59 lakh crore.
Kotak has outpaced peers in credit growth, indicating strong traction in retail and corporate lending despite broader economic headwinds.
Asset Quality: Stable, But With Caveats
- Kotak Mahindra Bank: Net NPA ratio stable at 0.34%, compared to 0.35% a year ago.
- HDFC Bank: Net NPAs rose slightly to 0.47% from 0.39% YoY.
- Axis Bank: Tighter norms saw net NPAs at 0.45%, up from 0.34% last year.
Kotak maintains the cleanest loan book among the three, while Axis is recalibrating after a stricter asset recognition policy.
Profitability: Mixed Trends
- Kotak Mahindra Bank:
- Standalone net profit fell 47% YoY to ₹3,281.68 crore, mainly due to a ₹3,519.9 crore one-time gain last year.
- Excluding exceptional items, core profit declined 7% YoY.
- HDFC Bank:
- Standalone net profit rose 12.2% YoY to ₹18,155 crore.
- Axis Bank:
- Net profit dropped 4% YoY to ₹5,806 crore, impacted by ₹614 crore provisioning due to stricter NPA recognition.
HDFC continues to post consistent profit growth, while Axis and Kotak have seen declines either due to base effects or regulatory changes.
Return on Assets (RoA): Margins Narrow
- Kotak Mahindra Bank: 0.48% (non-annualized); approx. 1.92% annualized.
- HDFC Bank: 0.48% (non-annualized); approx. 1.92% annualized.
- Axis Bank: 1.47% annualized.
Despite lower profits, Kotak and HDFC maintain healthy RoA levels, indicating efficient capital usage.
Market Sentiment & Stock Performance
- Kotak Mahindra Bank:
- Closed at ₹2,125 on Friday, down 0.8%.
- Near its 52-week high of ₹2,301 (touched on April 22, 2025).
- HDFC Bank:
- Ended at ₹2,004.5, down 0.5%.
- Close to its 52-week high of ₹2,035 (touched on July 24, 2025).
- Axis Bank:
- Performance subdued due to NPA-led provisions; stock relatively stable.
Investor sentiment remains bullish across the board, aided by the RBI’s push to boost system-wide lending.
Outlook: NIM Protection and CASA Growth in Focus
Going forward, investor focus will remain on the ability of banks to protect their net interest margins while scaling up low-cost deposit bases. Kotak Mahindra’s wide national footprint of 2,154 branches is expected to support growth in CASA (Current Account Savings Account) deposits.
The Reserve Bank of India’s dovish stance and ongoing regulatory reforms present both opportunities and margin challenges. Banks that can innovate lending models while keeping credit quality intact are likely to outperform.
