..... . VALI disclosures . .....: 13/05/26, SBI vs HDFC Bank

Wednesday, May 13, 2026

13/05/26, SBI vs HDFC Bank

HDFC Bank vs SBI: After several months of underperformance driven by global uncertainty and domestic headwinds, banking stocks are once again coming back into focus, with renewed investor interest building across the sector.

The Nifty Bank Index, which tracks India's leading and most liquid banking stocks, has declined over 4 per cent over the past month, extending its weak performance across the 3-month, 6-month and 12-month periods.

Timeframe	% Change
1 Week	-1.8%
1 Month	-4.2%
3 Months	-11.83%
6 Months	-8.1%
1 Year	-3.3%
5 Years	65.03%

Because of their large weight in the index, any rebound in major lenders like HDFC Bank and State Bank of India could significantly lift the broader banking sector. After their most recent quarterly updates, both stocks have regained attention, with investors closely watching for early signs of a recovery across the sector.

State Bank of India (SBI) VS HDFC Bank

Below is a comparative snapshot of State Bank of India (SBI), the country's largest public-sector lender, and HDFC Bank, India's leading private-sector bank, across key operational, financial, and market-related parameters:

Brokerage View

HDFC Share Price Target 2026

Jefferies maintains a BUY on HDFC Bank with a Rs 1,050 target price, implying 39 per cent upside.

The brokerage highlights that the profit is in line with estimates despite softer topline, offset by efficiencies, lower credit costs, and treasury gains. Deposit growth remains key. Credit quality is stable; expects 15 per cent PBT CAGR (ex-treasury). Bank remains a top pick.

SBI Share Price Target 2026

Emkay maintains BUY on State Bank of India with a target price of around Rs 1,225, implying around 26 per cent upside.

Emkay notes that growth remains strong, though margins disappoint due to low-yield corporate mix and repo cuts. Asset quality is improving.

On the outlook side, FY27 credit growth is guided at 13-15 per cent, NIM around 3 per cent. FY27E earnings cut 6 per cent, RoA around 1 per cent, RoE around 15 per cent. Risks include slowdown and treasury losses.

Stock Name	Brokerage	Stock Recommendation	Share Price Target	Upside%
HDFC Bank	Jefferies	BUY	Rs 1,050	~39%
State Bank of India (SBI)	Emkay	BUY	Rs 1,225	~26%

Q4 Results

Metric	SBI Q4 Results	HDFC Bank Q4 Results
Net Profit (Q4 FY26)	19,684 crore (+6% YoY)	20,350.76 crore (+8.04% YoY consolidated)
Net Profit (Standalone YoY)	18,643 crore	19,221.05 crore
Total Income	1,40,412 crore	89,809 crore
Profit before tax	26,076crore	102,141
Gross NPA	1.49%	1.15%
Dividend Payout	19%	31%
Dividend	Rs 17.35 per share	Rs 13 per share

Both State Bank of India and HDFC Bank delivered steady profit growth in Q4 FY26, with HDFC Bank showing slightly stronger earnings growth and better asset quality (lower GNPA). SBI has a higher total income and scale, while HDFC leads in profitability efficiency and higher dividend payout.

Banking stocks share price

HDFC Bank Share Price

The stock of India's largest private bank slipped over 1 per cent in the previous session to settle at Rs 755. The company's market capitalisation currently stands at Rs 11,62,362.96 crore.

SBI Share Price

The stock of India's biggest banking stock settled 0.3 per cent, or Rs 2.5 higher, at Rs 976.10 on May 12. The bank has a market capitalisation of Rs 9,01,000.58 crore.

Stock Price CAGR Comparison

Period	State Bank of India	HDFC Bank
10 Years	18%	10%
5 Years	22%	2%
3 Years	19%	-3%
1 Year	22%	-22%

CAGR (Compound Annual Growth Rate) is the smoothed annual return rate of an investment over a period, assuming profits are reinvested.

State Bank of India shows consistently strong long-term growth, while HDFC Bank has underperformed recently, especially over 3-5 years, despite historical strength. SBI currently demonstrates superior momentum.

Bottom Line

The State Bank of India demonstrates stronger long-term momentum and scale, while HDFC Bank remains efficient with better asset quality. Overall sentiment is improving, supported by stable earnings and attractive upside potential.

Report by EconomicTimes

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. We suggest its readers/investors to consult their financial advisors before making any money-related decisions.)

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Wednesday, May 13, 2026

13/05/26, SBI vs HDFC Bank

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