InCred Equities prefers HDFC Bank over ICICI Bank; here's why

livemint.com:

HDFC Bank is better placed through its granular branch expansion and faster customer acquisition compared to ICICI Bank which will ensure diversified and deeply penetrated growth with the sticky customer base. It likes both large private sector banks and has maintained ADD ratings on them. For HDFC Bank, the brokerage has a target price of ₹2000, implying a potential upside of almost 30 percent while for ICICI Bank, it has a target of ₹1,060, indicating an 11 percent upside.

"We believe both these banks are consistently improving their retail presence through offering diversified products, customized as per individual requirements. Both banks have set processes and formats in place which not only enhances smooth execution but also enables the management to maintain healthy asset quality. However, we prefer HDFC Bank over ICICI Bank amid superior ground presence and faster customer acquisition," it explained.

In the last one year, ICICI Bank has outperformed HDFC Bank, however, both stocks underperformed the benchmark Nifty Bank index. Shares of ICICI Bank gained 5.5 percent in this period while HDFC Bank was up around 4.4 percent. In comparison, the Nifty Bank index advanced over 9 percent in the last 1 year.

Meanwhile, in 2023 YTD, while ICICI Bank rose around 6 percent, HDFC Bank was in the red, down 6.4 percent. ICICI gave positive returns in 5 of the 10 months so far in this calendar year whereas HDFC Bank was positive just in 3. In comparison, the Nifty Bank rose over 2 percent in 2023 YTD.