The blue-chip NSE Nifty 50 index ended up 0.06% at 18,125.40, while the benchmark S&P BSE Sensex rose 0.2% to 60,967.05.
ICICI Bank rose as much as 14.2% to an all-time high and helped the Nifty bank index reach a fresh peak, after the lender posted an about 25% jump in quarterly profit on Saturday.
The bank index rose 2.2%, while the auto index and the IT sub-index fell 1.8% and 1.1%, respectively.
The Nifty mid-cap index was down 1.7%, while the small-cap index dropped 3%.
Analysts said the fall in small- and mid-cap stocks indicated retreating flows from retail investors after getting caught in a correction last week amid fears of higher valuations
The Nifty mid- and small-cap indexes fell more than 4% and 5%, respectively, last week.
Nomura on Monday downgraded India equities to "neutral" from "overweight", citing unfavourable risk-reward due to higher valuations and said a number of positives appear to have been priced in.
Meanwhile, the Nifty bank index has gained over 10% so far this month, outperforming a near 3% gain in benchmark indexes.
"This outperformance is justified by the bank results so far and the trend may continue since there is valuation comfort in the banking segment in an otherwise overvalued market," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
Domestic institutional investors sold $600 million worth of equities in capital markets last week, while foreign investors offloaded about $343 million, Refinitiv data showed.
Among individual stocks, IT solutions provider Coforge Ltd tumbled as much 12.4% after quarterly profit missed estimates, while ABB Power Products fell 6.5% on a drop in revenue.
(Reporting by Nallur Sethuraman and Gaurav Dogra in Bengaluru; Editing by Shailesh Kuber)