印度金融行业：ICICI能否复制Axis Bank的表现

India Financials: Can ICICI follow Axis? Over the last 9–12 months, Axis has outperformed ICICI by a significant margin. The sharppickup in growth has likely been the biggest driver, and Axis continues to build on thatmomentum, delivering ~19% YoY growth in 1Q27—comfortably ahead of peers such asHDFC and KMB and well above system growth. We highlight other factors underpinning thisoutperformance, including Axis's more optimal capital position, and explore whether ICICI toocan pivot towards higher growth—a key trend to watch this quarter. Pranav Gundlapalle+91 226 842 1407pranav.gundlapalle@bernsteinsg.com Ishan Mittal+91 226 842 1442ishan.mittal@bernsteinsg.com Axis’s outperformance over ICICI:Axis has seen a sharp re-rating, both in absolute termsand, more importantly, relative to ICICI over the last 3–4 quarters (Exhibit 4, Exhibit 5). Thestock has gained ~15% over the last year versus -1% for ICICI and, on a relative basis, nowtrades at a five-year-high valuation versus ICICI, albeit still below pre-COVID levels. Anirudh Gupta+91 226 842 1456anirudh.gupta@bernsteinsg.com Axis’s choice of growth over margins:We believe much of the outperformance can beattributed to Axis’s stronger growth over the last few quarters (Exhibit 1- Exhibit 3, Exhibit6), particularly as the margin gap with ICICI has widened during this period. The RoA gapwidened (Exhibit 7) and, more importantly, the PPoP-to-assets gap expanded by 40 bpsover the last twelve months (Exhibit 8). The NII-to-assets gap also widened by 20 bps(Exhibit 9), suggesting that stronger growth has come at the expense of margins. Lowercredit costs, improvement in CASA growth (Exhibit 10) and tighter opex growth have alsohelped, but growth remains the key differentiator. The quality gap persists:While growth has been stronger at Axis, ICICI continues to leadon most measures of franchise quality—including deposit franchise strength, balance sheetquality, liquidity buffers, provision buffers and profitability (Exhibit 11, Exhibit 12). However,in a benign environment with liquidity risks becoming less of a concern, the higher headlinegrowth is getting rewarded. Can ICICI follow Axis? -No obvious balance sheet constraints: There are no obvious balance sheet constraintsholding back ICICI. Its LCR/LDR is stronger than peers, core deposit growth is higher, andits starting RoA is well above peers, making the slower growth somewhat puzzling (link).- Signs of an inflection in retail lending:If the slower growth was largely driven byweakness in the higher-yielding retail (non-mortgage) segment, 4Q26 showed the firstsigns of a potential inflection for ICICI. However, growth in the segment remains well belowthat of Axis (Exhibit 13). - Higher capital remains a semi-structural drag:If a higher threshold for RoA/RoEis driving slower growth, it could take much longer for ICICI to return to industry-leadinggrowth rates. Its higher capital levels require higher RoAs to sustain similar RoE levels. Axis,meanwhile, with a more optimal capital position, can continue delivering RoEs comparableto larger banks despite operating with meaningfully lower RoAs (Exhibit 14, Exhibit 15). This will be a key trend to watch during the upcoming quarterly results. While few woulddispute the franchise quality gap between ICICI and Axis, a continuation of recent trendscould allow Axis to extend its outperformance versus ICICI. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We rate Axis, HDFC as Outperform, ICICI, KMB as Market-Perform. Links to other recent reports: 4 Jul 2026 - Quick Take: HDFCB 1Q27- The balancing act continues24 Jun 2026 - India Financials: Is a banking license worth it?17 Jun 2026 - India Financials: How retail underwriting works - Key takeaways from our webinar10 Jun 2026 - India Financials: PVBs vs. PSBs (4/n) – Beginning of the End of Outperformance10 Jun 2026 - RBI’s FCNR Push: Implications for Banks, Bonds and the INR8 Jun 2026 - India Financials: Do PVBs have an underwriting edge in retail lending?4 Jun 2026 - India Financials: Where are the margins headed? (1/n) DETAILS Source: Company reports, Bloomberg, Bernstein analysis EXHIBIT 5:… and a similar picture on a P/E basis as well. EXHIBIT 7:… as the RoA gap has actually widenedbetween Axis and ICICI over the last 12 months EXHIBIT 8:The widening of profitability gap is evenclearer when comparing the PPoP (Pre-Provisionsoperating profit) as % of assets … EXHIBIT 9:… and the NII (Net Interest Income) as % ofaverage assets which has widened significantly over thelast 12 months Source: Company reports, Bloomberg, Bernstein analysis EXHIBIT 10:CASA growth has picked up for Axis as well,but it is not materially different from broader systemtrends. ICICI meanwhile has seen a normalizationof its CASA performance after a period of stellaroutperformance in FY24-25. EXHIBIT 11:On most metrics of quality, ICICI remainsahead of Axis, be it CASA ratio… EXHIBIT 13:If ICICI's slower growth was driven by weaker