YES Bank, HDFC, Axis Bank shares among Nifty Bank losers: Why bank stocks fell today?

Shares of Axis Bank Ltd, HDFC Bank Ltd and YES Bank Ltd, among others, fell up to 6 per cent in Monday's trade, dragging the Nifty Bank lower by 1.5 per cent in Monday's trade. The fall was seen as net interest margin (NIM) reported by a handful of private lenders failed to meet Street expectations.

At 12.07 pm IST, Nifty Bank was quoting 867 points or 1.48 per cent lower at 57,668.35. Axis Bank fell to Rs 1,256.40, down 5.43 per cent, as healthy Q1 balance-sheet growth offset by continued margin pressure. The scrip was down 6 per cent earlier in the day. The consensus target on the counter, which included 32 fresh targets, stood at Rs 1,579.65, implying 25 per cent potential upside for the stock.

HDFC Bank fell 4.84 per cent to Rs 779.90 apiece. The consensus target price for HDFC Bank stands at Rs 1,029.80, which implied 25.60 per cent potential upside for the stock over Friday's closing price. Macquarie suggested a target of Rs 1,150 on the stock, while CLSA has a higher target of Rs 1,200 on the scrip. Investec gave a target of Rs 920, Citi Rs 970, HSBC Rs 990, Morgan Stanley Rs 1,025, Jefferies Rs 1,050, Bernstein Rs 1,150 and BNP Paribas Rs 1,400. 

Kotak Mahindra Bank was quoting 2.4 per cent lower at Rs 380.60. "KMB remains focused on loan growth in RoA-accretive segments, along with improving operating efficiency during FY27. While this augurs well from an RoA perspective, sub-optimal deployment of capital and leverage drives inferior RoE (12 per cent), which is a concern," HDFC Institutional Equities said while suggesting a 'Buy' and a target of Rs 460 on the stock.

KMB's Q1 profit grew 26 per cent YoY, supported by normalisation in credit costs. But operating performance remained underwhelming, said JM Financial. " We believe execution on the acquisition, acceleration in loan growth and uptick in margins remain the key points to monitor," JM said. 

YES Bank shares fell 1.95 per cent to Rs 23.15. Despite higher credit growth, YES Bank posted a PAT miss, mainly due to higher provisions on account of slower SR recoveries and staff cost. NIM was flat but remained relatively soft. Headline asset quality was stable, though SME witnessed uptick in slippages, said Nuvama Institutional Equities.

"Management expects growth to remain strong and has guided for 1 per cent RoA in FY28. Given weak core profitability and valuations ahead of fundamentals, we maintain ‘reduce’ with a target of Rs 22 per share," it added. "We believe court judgement on AT1 bond issue and any potential increase in stake by SMFG will be key monitorable." 

Based on the first set of Q1 results, Equirus Securities said Axis Bank remained its top pick among large private banks, followed by HDFC Bank, ICICI Bank and KMB.

AU SFB slipped 3 per cent to Rs 999.40. ICICI Bank, meanwhile, was quoting 0.73 per cent higher at Rs 1,454.90. "ICICI Bank saw marked acceleration in credit growth to 19.9 per cent YoY in Q1FY27, with broad-based traction across segments. Despite faster growth, NIM witnessed sequential expansion, while other large private banks reported contraction. Asset quality remained resilient despite Q1 being a seasonally weak quarter, with a credit cost of 32bps, the lowest among peers," Anand Rathi said.