The Q4 results of the private banks as well as state-run lenders were mixed with net interest margins surprising positively for larger banks. Banks delivered a credit growth of 11% year-on-year (YoY) Slower credit growth versus Street expectations was primarily visible amongst the larger Axis Securities: Banks' deposit growth during the quarter was broadly in line with credit growth. Private banks pointed to intense competitive pricing in the segment, thereby keeping growth muted, according to Axis Securities. Most banks reported improved CASA Ratios. Axis Securities has recommended four banking stocks to buy after Q4 results 2025.

These banking stock picks are ICICI Bank, HDFC Bank, State Bank of India (SBI) and City Union Bank. ICICI Bank stock remains Axis Securities' most preferred pick amongst the banks. HDFC Bank's margins will continue to operate in the range of 3.4% - 3.5% over FY26-27E. HDFC Bank is expected to deliver a steady 13% and 18% CAGR advances and deposits growth over FY25-27E. Axis Securities has a 'Buy' call on HDFC Bank shares, with a target price of $ 2,250 per share.

S Axis Securities expects SBI's RoA and RoE to range between 1% and 14-15% over FY26-27E. It has a 'Buy' rating on SBI shares, with a target price of $ 1,025 apiece. It recommends buying City Union Bank shares for a target price of $ 225 apiece. The shares are currently trading at $225 per share. The bank has a market capitalisation of $1.2 billion.