SBI Vs Axis Bank Share Price: Which Large-Cap Bank Stock Has Potential To Become The Next HDFC Bank?

Best Banking Stocks: On the Indian stock market, the largest banking stock in terms of market value is HDFC Bank with over Rs 13.05 lakh crore m-cap. The giant is tailed by other large-cap banks such as ICICI Bank, SBI, Kotak Mahindra, IndusInd Bank and Axis Bank in the top banking list. In its latest report, brokerage LKP Securities stated that due to the current deep price correction, both large-cap and mid-cap stocks are now available for prudent choice for sustainable growth. They are also, the safer bets in the current market scenario. LKP's choice for investment in banking stocks is SBI and Axis Bank. Do the two banks have the potential to be the next HDFC Bank?

SBI Share Price:

According to LKP, SBI has been one of the consistent performers in the banking system, supported by healthy growth in its business and sustained profitability. With the easing of liquidity conditions and repo rate cuts from the government, SBI is positioned well in the long term to capitalize on the improving credit demand, given its favourable CD ratio compared to the industry and wide distribution network. Further, the impact on NIMs would be minimal due to rate cuts, owing to its lower share of repo linked book.

Moreover, the brokerage added that the bank's asset quality has improved over time and is expected to remain strong in the current macro conditions, as lead indicators SMA 1 and SMA 2 have lowered for the recent quarter. Additionally, the stock is currently trading at 1.1x FY27E BVPS, lower than its historical three-year average of 1.5x.

Hence, in its valuation note, LKP said, "We assign BUY rating on the stock with a SOTP-based target price of ₹890. This includes valuing the core bank at 1.1x FY27E BVPS, and attributing ₹158/share to its subsidiaries."

Currently, SBI is at Rs 727.75 apiece, with a market cap of Rs 6,49,489.22 crore. It is ranked as the sixth largest company in India, and the third largest bank in terms of m-cap after ICICI Bank and HDFC Bank.

However, unlike HDFC Bank, SBI has corrected significantly in 2025 so far. SBI's latest week performance is down marginally, while its month-on-month performance is flat. In six months, the stock has dropped by 7.35%. YTD, the PSU stock has tumbled by 8.26%.

Axis Bank Share Price:

In LKP's view, Axis Bank has strategically shifted towards retail and SME lending, improving its loan mix and reducing exposure to low-yielding assets, leading to 18% RoA in FY24.

The brokerage expects RoA to trend downward in FY25 to ~16% as the bank has consciously slowed down growth in the unsecured retail segment, due to the current challenging macro environment.

Nevertheless, it pointed out that Axis Bank also aims to sustain a net interest margin (NIM) of 3.8%, supported by better asset pricing and funding cost control. Moreover, asset quality has remained resilient, with a consistent decline in NPAs and lower fresh slippages, as risks in the unsecured segment remain manageable. Loan and deposit growth trends lag peers, but structural improvements, including reduced operational costs and improvement in credit costs, could drive its future performance. Additionally, the stock is currently trading at 1.3x FY27E BVPS, lower than its historical three-year average of 1.9x. On the valuation, LKP said, "We assign a BUY rating on the stock based on 1.6x FY27E BVPS with a target price of Rs. 1,251, with a potential upside as the demand scenario improves."

At present, Axis Bank is at Rs 1010.15 apiece, with a market cap of Rs 3,12,786.96 crore on BSE. On the current market value, Axis Bank is the nineteenth-largest company in India and fifth largest bank in the country. Axis Bank's latest weekly performance is down by 2.24%, while its six-monthly performance is down by 18.03%. YTD, the stock is down by 6%. However, month-on-month performance is in green by nearly 2%.

On the other hand, HDFC Bank's share price has witnessed lesser bearish sentiment in 2025. Its latest weekly performance is up by 1%, while in six-months, the gains is over 2%. YTD, the stock is down by 4.3%, still better than SBI and Axis Bank's performance.

HDFC Bank VS SBI VS AXIS BANK:

Here are the key fundamentals of HDFC Bank, Axis Bank, and SBI as per Trendlyne data:

SBI	Axis Bank	HDFC Bank
Price to Earning Ratio is 8.19, lower than its sector PE ratio of 19.9.	Price to Earning Ratio is 11.1, lower than its sector PE ratio of 19.9.	Price to Earning Ratio is 18.77, lower than its sector PE ratio of 19.9.
Stock Price fell 1.78% and underperformed its sector by 6.52% in the past year.	Stock Price fell 4.54% and underperformed its sector by 9.28% in the past year.	Stock Price rose 17.26% and outperformed its sector by 12.52% in the past year.
Debt to Equity Ratio of 1.65 is higher than 1. This implies that company assets are financed through debt.	Debt to Equity Ratio of 1.45 is higher than 1. This implies that company assets are financed through debt.	Debt to Equity Ratio of 1.6 is higher than 1. This implies that company assets are financed through debt.
Return on Equity(ROE) for the last financial year was 17.31%, in the normal range of 10% to 20%.	Return on Equity(ROE) for the last financial year was 16.8%, in the normal range of 10% to 20%.	Return on Equity(ROE) for the last financial year was 14.03%, in the normal range of 10% to 20%.
Mutual Fund Holding increased by 0.88% in the last quarter to 12.34.	Mutual Fund Holding increased by 3.43% in the last quarter to 29.03.	Mutual Fund Holding decreased by 0.6% in the last quarter to 23.93.
Promoter Share Holding decreased by 0.08% in the most recent quarter to 57.43%.	Promoter Share Holding decreased by 0.06% in the most recent quarter to 8.23%.	Interest Coverage Ratio is 1.66, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).
Interest Coverage Ratio is 1.38, in the normal range of 1 to 1.5.	Interest Coverage Ratio is 1.64, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).	FII/FPI have increased holdings from 48.02% to 49.21% in Dec 2024 qtr.
FII/FPI have decreased holdings from 10.71% to 10.27% in Dec 2024 qtr	Promoter Pledges are zero.	Promoter Pledges are zero.
Promoter Pledges are zero.	Mutual Funds have increased holdings from 25.60% to 29.03% in Dec 2024 qtr.
Source: Trendlyne data

Among common factors are that both SBI and Axis Bank have underperformed in the sector, while they both have seen decline in FII holdings. However, mutual funds have been buyers of both SBI and Axis Bank, while sellers in HDFC Bank shares. The three stocks PE ratio is low, but debt-to-equity ratio is higher in the three stocks. Also, return on equity is stable in the three stocks, however, promoter shareholding in Axis Bank and SBI has declined in December 2024 quarter.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.