Axis Bank vs IndusInd vs IDFC First: What should you buy post Q4?(Pixabay)AI Quick ReadPrivate bank stocks moved in different directions on Monday, April 27, as Q4FY26 results highlighted a sharp divergence in earnings quality, provisioning trends and investor sentiment across Axis Bank, IndusInd Bank and IDFC First Bank.
While Axis Bank slipped on margin pressure and higher provisions, IndusInd Bank rallied on a return to profitability, and IDFC First Bank edged higher on steady growth and improving asset quality. The contrasting moves underline how markets are rewarding visibility and punishing uncertainty despite broadly stable fundamentals.
Shares of Axis Bank declined around 5%, falling as much as 4.7% to ₹1301.00 on the BSE, after the lender reported a marginal decline in quarterly profit. Net profit stood at ₹7,071 crore in Q4FY26, slightly lower than ₹7,118 crore a year ago.
Earnings were impacted by a sharp rise in provisions, which jumped 139% YoY to ₹3,522 crore from ₹1,359 crore, as the bank created a contingency buffer amid geopolitical uncertainties in West Asia.
On the asset quality front, the bank reported sequential improvement, with GNPA easing to 1.23% from 1.40% and NNPA declining to 0.37% from 0.42%. A tax write-back of ₹580 crore provided some support to earnings, but failed to offset the impact of higher provisions and trading losses.
In contrast, shares of IndusInd Bank gained around 6%, rising as much as 5.99% to ₹899.15 on the BSE, after the lender reported a sharp turnaround in profitability.
The bank posted a net profit of ₹594.2 crore for Q4FY26, compared with a loss of ₹2,236 crore in the year-ago period. Net interest income (NII) increased 43.4% YoY to ₹4,372 crore, while net interest margin (NIM) improved significantly to 3.39% from 2.25%.
Asset quality also showed improvement, with gross NPA ratio declining to 3.43% in the March quarter from 3.56% in the previous quarter, supporting investor confidence in the recovery trajectory.
Shares of IDFC First Bank advanced around 3%, touching a high of ₹69.29 on the BSE, after the lender reported stable earnings and improving asset quality.
Net profit rose 5% YoY to ₹319 crore in Q4FY26, compared with ₹304 crore in the same period last year. The performance was supported by steady growth in lending operations, even as the bank navigated challenges related to a fraud incident during the quarter.
Asset quality improved on a year-on-year basis, with GNPA declining to 1.61% from 1.87% and NNPA easing to 0.48% from 0.53%. Provisioning trends also showed a sharp improvement, indicating easing stress across the loan book.
Post Q4FY26 results, investors are facing a clear divergence among private banks, with stability, growth visibility and turnaround potential shaping investment choices. The decision now hinges on risk appetite—whether to prioritise steady compounding or chase higher-risk turnaround potential.
Vinit Bolinjkar, Head of Research at Ventura Securities, said, “Post Q4, our preferred pick among Axis Bank, IndusInd Bank and IDFC First Bank would be Axis Bank, given its stronger operating performance, better asset quality and healthier balance sheet momentum.”
Bolinjkar added that Axis Bank reported advances growth of 19% YoY and 6% QoQ, with deposits rising 14% YoY and 6% QoQ. He noted that asset quality remained healthy with GNPA/NNPA at 1.23%/0.37% and Q4FY26 profit at ₹7,071 crore. He also pointed out that IndusInd Bank remains a recovery candidate, but weak loan growth of 8% YoY, a 3% YoY decline in deposits, elevated GNPA of 3.43% and low RoA of 0.45% make the risk-reward less attractive.
He further indicated that IDFC First Bank continues to show strong retail deposit and loan growth, but Q4 profit was impacted by one-offs, making near-term earnings visibility relatively weaker than Axis.
Meanwhile, Himanshu Gupta, Head of Research – Retail Broking (AVP) at Jainam Broking Limited, has also picked Axis as its top pick.
In terms of positioning, Gupta indicated that Axis Bank is the top pick for conservative to moderate investors, with a Buy rating and target price of ₹1,500, supported by strong asset quality, scale and consistent performance. He added that IndusInd Bank is suited for aggressive investors, with a speculative Buy rating and target price of ₹1,100, given its turnaround potential but higher volatility.
Gupta described Axis Bank as a steady large-cap performer, noting that it posted a profit of ₹7,071 crore, with GNPA improving to 1.23%. He pointed to retail disbursement strength and CASA growth of 7% QoQ, while highlighting that Citibank integration synergies are beginning to materialise.
He further outlined IndusInd Bank as a high-risk, high-reward turnaround story, highlighting a sharp swing in profitability from a ₹2,329 crore loss to a ₹594 crore profit. He noted that NII rose 43% YoY to ₹4,371 crore and the bank declared a dividend of ₹1.50 per share, signalling stability. He added that the stock is trading below 1x book value, indicating deep value if the turnaround sustains, with potential upside of 18–19% and even 10–40% in some scenarios.
Gupta cautioned that risks remain, with GNPA rising to 3.43% from 3.13%. He noted that the bank may require 3–4 quarters of consistent performance before a full re-rating materialises.
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.
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