Nifty Bank rebounds 15% in 20 days: PSU vs private banks — Who is leading rally?

Banking stocks have seen a sharp recovery in recent weeks, with the Nifty Bank index rising strongly from its recent lows, supported by steady gains in frontline lenders and improved quarterly earnings.

The Nifty Bank index has climbed 7,255.55 points, or about 14.5 per cent, from its 52-week low of 49,954.85 touched on April 2, 2026. The index was trading at 57,210.40 as of 12:20 pm on April 21, 2026. Despite the rebound, it remains 4,554.45 points, or nearly 8 per cent, below its 52-week high of 61,764.85.

Private banks lead gains, PSU banks steady

The sharp rise in the index within a span of less than three weeks indicates renewed buying interest in banking stocks, particularly after the recent correction. The recovery has been led by private sector lenders, though gains have been uneven across stocks.

Among major lenders, ICICI Bank has risen 10.88 per cent over the past month, while Axis Bank gained 13.43 per cent during the same period. HDFC Bank advanced 3.45 per cent, and Kotak Mahindra Bank moved up 3.89 per cent.

Public sector banks have also seen moderate gains. Punjab National Bank rose 2.82 per cent over the past month and added 3.57 per cent in the last week.

State Bank of India showed steady performance, gaining 4.38 per cent over the past week and 4.93 per cent in one month. The stock has risen 12.73 per cent so far in 2026 and 35.93 per cent over the past year.

Q4 earnings support sentiment

The recent rally in banking stocks has coincided with the March quarter earnings season, where several lenders reported growth in profit and improvement in asset quality.

HDFC Bank reported an 8.04 per cent increase in consolidated net profit at Rs 20,350.76 crore for the March quarter, compared with Rs 18,834.88 crore in the year-ago period. On a standalone basis, net profit rose 9.11 per cent year-on-year to Rs 19,221.05 crore.

The bank’s total income stood at Rs 89,809 crore in the January-March 2026 period, while total expenditure declined to Rs 62,006 crore. Asset quality improved, with gross non-performing assets ratio declining to 1.15 per cent from 1.24 per cent in the previous quarter and 1.33 per cent a year ago. Provisions also fell to Rs 2,610 crore from Rs 3,193 crore.

ICICI Bank also reported steady growth, with consolidated net profit rising 9.28 per cent to Rs 14,755 crore in the March quarter. Standalone net profit increased 8.5 per cent to Rs 13,702 crore.

The bank posted an 8.4 per cent rise in net interest income to Rs 22,979 crore, while non-interest income grew 5.6 per cent to Rs 7,415 crore. Asset quality improved, with gross NPAs declining to 1.40 per cent from 1.53 per cent in the previous quarter and 1.67 per cent a year ago. Provisions dropped sharply to Rs 96.16 crore.

Mid-sized banks show improvement

Yes Bank reported a sharp improvement in profitability, with net profit rising 45 per cent to Rs 1,068 crore in the March quarter. The bank indicated that it has completed its recovery phase and is now positioned to grow in line with the broader banking sector.

The management said the lender will align its loan growth with industry trends going forward, while maintaining underwriting discipline. It also highlighted that the bank has adequate capital to support growth for the next few quarters.

Bank of Maharashtra reported a 35 per cent rise in net profit at Rs 2,014 crore for the March quarter, supported by higher core income and lower bad loans. Net interest income rose 19 per cent to Rs 3,702 crore, driven by a 22 per cent increase in loans.

The bank’s asset quality improved, with gross NPAs declining to 1.45 per cent from 1.74 per cent a year ago, while net NPAs fell to 0.13 per cent. Total business grew 18 per cent to Rs 6.42 lakh crore.

The recent improvement in earnings, along with better asset quality and a stable growth outlook, has supported the recovery in banking stocks.

Nifty PSU Bank outperforms private banks

The Nifty PSU Bank index is trading at 9,005.65, up 2,943.65 points or about 48.6 per cent from its 52-week low of 6,062.00, indicating a significantly stronger recovery compared to private banks.

In contrast, the Nifty Private Bank index has risen about 14.1 per cent from its 52-week low of 23,957.45 to 27,344.45.

This implies that PSU banks have rallied about 3.4 times more than private banks from their respective lows.

Despite the sharp recovery, the Nifty PSU Bank index remains 913 points, or around 9.2 per cent, below its 52-week high of 9,918.65. Similarly, the Nifty Private Bank index is still 2,404 points, or about 8.1 per cent, below its 52-week high of 29,748.45.

In terms of recent performance, the PSU bank index has gained 3.31 per cent over the past week, 4.87 per cent in one month, 2.54 per cent in three months, 14.63 per cent in six months and 5.03 per cent so far this year.

Meanwhile, the private bank index has risen 2.40 per cent in the past week and 8.22 per cent in one month, but declined 2.91 per cent in three months, 3.81 per cent in six months and 5.01 per cent on a year-to-date basis.