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CLSA Cuts Target Price For Banks By Up to 70%

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In the wake of the pandemic, the global firm CLSA has cut its target price on banks due to risk on asset quality which is likely to worsen.

Even though RBI in its recent measures announced on Friday has provided incentive for extending credit by reducing reverse repo cut by 25 basis points.

CLSA Cuts Target Price For Banks By Up to 70%
 

For Indian banks, the target price by the global brokerage firm has been declined by any way between 20-70%. "The unprecedented disruption caused by Covid-19 and a 40-day national lockdown have put brakes on an already struggling credit environment. Our interactions with banks indicate that normalcy could be restored in two to three quarters depending on the severity of the disruption," said CLSA.

As per CLSA, the worst woes shall be from the MSME sector, also the distress shall be seen from the unsecured credit amid lay-offs and pay-cuts being announced due to Covid 19.

Also, credit off take will go do as many of the PSU banks are currently in the process of completing their merger procedure.

Bank Rating Previous Target price New Target Price
Axis Bank Buy 900 595
Bank of Baroda Buy 125 70
Bank of India - 60 30
Canara Bank Sell 190 80
HDFC Bank Sell 1380 1100
ICICI Bank Buy 580 460
IndusInd Bank Buy 1950 595
Kotak Mahindra Buy 1960 1425
PNB Sell 60 22
SBI Buy 390 240
UBI Buy 80 40

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Read more about: clsa target price banking stocks
Story first published: Tuesday, April 21, 2020, 8:34 [IST]
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