Nifty Bank Outperforms Benchmark; HDFC Bank, ICICI Bank Top Performers After Q1 Results

The Nifty Bank index outshone the broader market on Monday, rising 0.66% at intraday even as the benchmark Nifty 50 slipped into the red. The divergence in performance comes on the back of robust earnings reported by key banking heavyweights over the weekend, which lifted sentiment in the financial sector despite broader market weakness.

While the Nifty 50 opened lower and continued to face selling pressure, weighed down by weakness in sectors like IT and energy, banking stocks found favor among investors. The Nifty Bank index was in focus, buoyed by strong quarterly results from HDFC Bank and ICICI Bank, along with earnings from Bandhan Bank.

Leading the gains in the banking pack was HDFC Bank, which surged over 2% in early trade. The bank posted a 12% year-on-year rise in standalone net profit to Rs 18,160 crore for Q1 FY26, beating Bloomberg consensus estimates of Rs 17,652 crore. Despite a sharp increase in provisions and contingencies—rising to Rs 14,441 crore from Rs 2,602 crore a year ago—the bank’s profitability remained strong. A key contributor was the Rs 9,128 crore net gain from the sale of shares in its subsidiary HDB Financial Services, which helped bolster its bottom line.

ICICI Bank followed closely, gaining over 1.6% after reporting a 15% year-on-year jump in net profit to Rs 12,768 crore, surpassing analyst expectations. The bank’s net interest income rose 11% to Rs 21,635 crore, supported by strong loan growth and stable asset quality. While its net interest margin (NIM) saw a slight dip to 4.34%, the management indicated that margins may compress further in the September quarter, depending on the Reserve Bank of India’s policy actions. Nonetheless, the bank’s overall performance was viewed positively by the market.