ICICI Bank, HDFC Bank, Groww Among Top Picks After Q1 2026 Results: Kotak Neo Research

ICICI Bank, HDFC Bank, Aditya Birla Capital, Billionbrains Garage Ventures (Groww), GHCL and Muthoot Finance are in focus after Kotak Neo Research reviewed their June quarter (Q1 FY27) performance. Kotak Neo Research retained BUY ratings on ICICI Bank, HDFC Bank, Groww, Aditya Birla Capital and GHCL, while maintaining an ADD rating on Muthoot Finance, citing resilient loan growth, healthy earnings, strong AUM expansion and a steady business outlook across banking, NBFC, financial services and chemicals companies.

Among the key calls, Kotak Neo Research reiterated its BUY rating on ICICI Bank, HDFC Bank, Groww, Aditya Birla Capital and GHCL, while retaining an ADD rating on Muthoot Finance with a lower fair value.

ICICI Bank

Kotak Neo Research has retained its BUY rating on ICICI Bank with an unchanged fair value of ₹1,800 against the current market price of ₹1,460, calling the lender one of its "top ideas." The research note said the bank entered FY27 with improving loan growth, a stable net interest margin (NIM) and no signs of stress in credit costs, suggesting that the worst phase of pressure on revenue growth is now behind it.

The report highlighted ICICI Bank's best-in-class NIM profile, noting that its margins remained stable even as several peers reported compression during the same period. It also said the bank's strong liability franchise positions it well across different competitive and interest-rate environments. On the downside, the report noted that retail loan growth continued to lag overall advances, while capital market-related subsidiaries delivered a mixed performance.

HDFC Bank

Kotak Neo Research maintained its BUY rating on HDFC Bank with a fair value of ₹1,050 against the current market price of ₹753.

The report said the bank navigated a challenging FY26, with NIM remaining under pressure due to the interest-rate cycle and an unfavourable funding mix. However, improving loan growth and stable asset quality helped offset these headwinds. It added that the post-merger recovery in return on equity (RoE) and valuation has been slower than expected, partly due to the overhang from the Chairman's resignation.

According to Kotak Neo Research, easing competitive intensity, improving liability conditions and the FCNR window could support funding flexibility. Better visibility on NIM is expected to drive earnings upgrades and support a valuation re-rating, with current valuations already reflecting most near-term concerns.

Billionbrains Garage Ventures (Groww)

Kotak Neo Research retained its BUY rating on Billionbrains Garage Ventures (Groww) with an unchanged fair value of ₹245 against the current market price of ₹194.

The report said Groww exited FY26 as a stronger, more profitable and diversified platform. Revenue increased 19% year-on-year despite regulatory changes and softer market conditions, while margin funding (MTF), commodities and lending together contributed nearly half of incremental revenue.

It also expects the company to deliver a 20-25% revenue CAGR, EBITDA margins of 65-67% and around 25% return on equity (RoE) over FY2027-30. It also noted that Groww accounted for 43% of new SIP registrations in India during FY26, with more than 80% of new customers acquired organically without paid marketing.

Aditya Birla Capital

Kotak Neo Research has retained its BUY rating on Aditya Birla Capital with a fair value of ₹460 against the current market price of ₹404.

The report highlighted strong growth across the group's lending and insurance businesses. Assets under management (AUM) rose 28% year-on-year in the NBFC business and 50% in the housing finance business, while annualised premium equivalent (APE) in the life insurance segment increased 26%.

Standalone profit after tax (PAT) stood at ₹890 crore for Q1 FY27, up 15% year-on-year and 7% ahead of Kotak Neo Research's estimates. Net interest income (NII) rose 23% year-on-year to ₹1,990 crore, while loan disbursements increased 34% to ₹21,200 crore. The report also pointed to strong margin expansion in the life insurance business, supported by product improvements and operating leverage, prompting Kotak Neo Research to upgrade its FY27 growth outlook.

GHCL

Kotak Neo Research retained its BUY rating on GHCL while revising its fair value marginally lower to ₹618 from ₹628 earlier. The stock's current market price stands at ₹445.

The report said revenue remained subdued during Q1 FY27, although EBITDA and PAT exceeded its expectations. Profit after tax rose 32.7% year-on-year to ₹191 crore, supported by an exceptional gain of ₹54 crore. EBITDA margin improved to 27% on better realisations, lower input costs and operational efficiencies.

The firm reduced its FY27 and FY28 earnings estimates by 16-17% to reflect weaker soda ash prices, which management expects to persist through the second quarter. However, the report expects new bromine and vacuum salt projects, scheduled to commence operations in Q2 FY27, to partly offset the pricing weakness.

Muthoot Finance

Muthoot Finance shares came under selling pressure on Monday, August 3, falling over 10% after the company reported its Q1 FY27 earnings, as investors reacted to weaker-than-expected margins and a softer earnings outlook despite healthy loan growth

Kotak Neo Research maintained its ADD rating on Muthoot Finance but lowered its fair value to ₹3,400 from ₹3,925 earlier. The stock is currently trading around ₹3,120.

The report said loan growth of 5.7% quarter-on-quarter was achieved despite a 4% decline in gold prices during the quarter. However, it noted that yields fell faster than expected because of a changing product mix and intensifying competition.

Standalone PAT rose 25% year-on-year to ₹2,550 crore but missed Kotak Neo Research's estimate by 19%. Net interest margin declined 173 basis points year-on-year to 10.4%, well below its estimate of 12.4%. The report added that the business remains sensitive to movements in gold prices as well as continued competitive pressure.

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