India Financials: Can ICICI follow Axis?

Research evidence excerpt

India Financials: Can ICICI follow Axis?

6 July 2026

India Financials

Over the last 9–12 months, Axis has outperformed ICICI by a significant margin. The sharp Pranav Gundlapalle

+91 226 842 1407 pickup in growth has likely been the biggest driver, and Axis continues to build on that

pranav.gundlapalle@bernsteinsg.com momentum, delivering ~19% YoY growth in 1Q27—comfortably ahead of peers such as

HDFC and KMB and well above system growth. We highlight other factors underpinning this

Ishan Mittal outperformance, including Axis's more optimal capital position, and explore whether ICICI too

+91 226 842 1442

ishan.mittal@bernsteinsg.com can pivot towards higher growth—a key trend to watch this quarter.

Anirudh Gupta Axis’s outperformance over ICICI: Axis has seen a sharp re-rating, both in absolute terms

+91 226 842 1456 and, more importantly, relative to ICICI over the last 3–4 quarters (Exhibit 4, Exhibit 5). The

anirudh.gupta@bernsteinsg.com stock has gained ~15% over the last year versus -1% for ICICI and, on a relative basis, now

trades at a five-year-high valuation versus ICICI, albeit still below pre-COVID levels.

Axis’s choice of growth over margins: We believe much of the outperformance can be

attributed to Axis’s stronger growth over the last few quarters (Exhibit 1- Exhibit 3, Exhibit

6), particularly as the margin gap with ICICI has widened during this period. The RoA gap

widened (Exhibit 7) and, more importantly, the PPoP-to-assets gap expanded by 40 bps

over 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. Lower

credit costs, improvement in CASA growth (Exhibit 10) and tighter opex growth have also

helped, but growth remains the key differentiator.