SBI, ICICI Bank & HDFC Bank Emerge As Best Stock Picks Ahead Of 2026

Ahead of the Q3FY26 earnings report, State Bank of India (SBI), ICICI Bank, and HDFC Bank emerge as the best banking stock picks with on expectations of continued strong loan growth in mid teens, driven by retail and SME, along with broadly stable NIMs, according to a brokerage report.

Within the pack, ICICI Bank and HDFC Bank stand out owing to their sustained business momentum, resilient asset quality trends and consistently superior return ratios. These attributes reinforce their ability to defend and potentially enhance market leadership, even as the macro environment evolves, as per a Deven Choksey report.

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HDFC Bank Q3FY26 Earnings Preview

"HDFC Bank is expected to deliver Q3FY26 NII of INR 3,27,450 Mn, implying YoY growth of 6.8% on the back of steady loan repricing and resilient margins despite elevated funding costs. PPOP is estimated at INR 2,70,904 Mn, broadly flat QoQ given higher operating expenses but supported by healthy non interest income traction," it said.

The profit after tax (PAT) is "projected at INR 1,84,138 Mn, up 10.0% YoY as normalised credit costs offset modest tax outgo".

Meanwhile, "advances are likely to grow 8.8% YoY to INR 2,73,93,264 Mn while deposits rise 15.9% to INR 2,97,13,564 Mn, driven by granular retail term deposits and stable CASA, positioning the bank for sustained earnings compounding over coming quarters."

ICICI Bank Q3FY26 Earnings Preview

The Mumbai-headquartered bank is expected to deliver "steady Q3FY26 performance with base case net interest income of around INR 2,30,950 mn, implying YoY growth of about 7.3% and a modest QoQ uptick as margins stabilise after the Q2FY26 compression."

"Net PPOP is projected at nearly INR 1,94,987 mn, supported by controlled operating expenses
and resilient fee income. PAT is estimated at INR 1,30,871 mn, implying YoY growth of about 6.0% as lower provisions partly offset elevated opex," it said.

"Advances are likely to grow about 11.4% YoY and 3.9% QoQ, led by retail, business banking and SME; deposits are expected to rise nearly 11.8% YoY with CASA ratio improving towards 41.1%, underpinning stable NIMs and earnings for the coming quarters through granular loan growth and contained credit costs," it added. 

SBI Bank Q3FY26 Earnings Preview 

The public sector bellwether SBI is likely to post “Q3FY26 net interest income of about INR 4,71,670 mn, implying healthy growth of nearly 13.8% YoY and high single digit QoQ, supported by mid teens advances traction and broadly stable NIMs around 3.0%.”

"Pre provisioning operating profit is projected at INR 2,81,355 mn, reflecting higher operating expenses from wage revision and tech spends but offset by core fee momentum. Adjusted PAT is estimated at INR  1,73,957 mn, up roughly 3% YoY, as normalised treasury gains and slightly higher credit costs partly offset income, as per a Deven Choksey report.

“Loan growth should remain led by retail, SME and overseas book, driving advances growth of about 13.8% YoY, while deposits are likely to grow 9.3% with steady CASA, positioning the bank for strong earnings compounding over the next few quarters,” it said.