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He said, “ICICI remains a good power of compounding, but I do believe that there are some other stocks like HDFC Bank or IndusInd Bank where there is also a bit of a rerating possible because people have been a bit negative over the last 12-18 months and there would be a greater opportunity available.”

“Selectively where you can see a further uptick to return on assets (RoA) and consequently further rerating, such names definitely should be a part of your core portfolio and therefore, after HDFC Bank, we are preferring IndusInd Bank and ICICI remains our third preferred pick,” he added.

While Ganapathy is optimistic about the sector's prospects, he also highlights the importance of evaluating company valuations. His perspective on Bajaj Finance, a notable financial player, is enlightening. While he acknowledges Bajaj Finance's standing as a sound company, he raises concerns about its expensive valuations.

In the initial quarter of FY24, HDFC Bank reported an independent net profit of Rs 11,951.7 crore, surpassing CNBC-TV18's anticipated figure of Rs 11,433.5 crore. This marks a substantial increase from the Rs 9,195.99 crore profit registered in the corresponding period of the previous year. The bank's net interest income (NII) for Q1FY24 amounted to Rs 23,599.1 crore, slightly below CNBC-TV18's estimated projection of Rs 23,922.6 crore.

ICICI Bank disclosed a net profit of Rs 9,648 crore. This marks a notable growth of 39.7 percent compared to the previous year, surpassing predictions made by analysts. The second-largest private bank in India has outperformed expectations with its impressive financial performance.

In the quarter ending in June, IndusInd Bank announced a significant increase of 32.5 percent in net profit, totaling Rs 2,123.6 crore. Notably, the bank's vehicle finance division achieved a 21 percent rise year-on-year, primarily driven by robust disbursements in commercial vehicles, utility vehicles (UVs), and automobiles. Nonetheless, disbursements for tractors and two-wheelers showed subdued growth. Within the consumer segment, utility vehicles and credit card divisions exhibited remarkable year-on-year growth of 44 percent and 39 percent, respectively.