SBI, HDFC, ICICI To AU SFB: THESE 5 Bank Stocks Can Deliver Strong Returns In Long-Term | Check Target Price

SBI, HDFC, ICICI, AU Small Finance: India's leading lenders faced a turbulent year, weighed down by margin pressure and persistent FII selling. While large banks delivered muted returns in the last year, mid-sized banks outperformed their bigger peers and gave strong returns. In the long run, India's banking sector's performance is expected to improve, with a strong recovery in macro and earnings.

Private banks are expected to report a strong earnings CAGR of nearly 21% during FY26-FY28, while PSU banks are likely to deliver an earnings CAGR of around 8% over the same period. For investors looking to invest in banking stocks, Motilal Oswal has identified its top picks in the sector.

Bank Stocks That Can Deliver Strong Returns

ICICI, HDFC Bank, State Bank of India, and AU Small Finance Bank are top preferred picks that can deliver strong returns in the long-run, as per Motilal Oswal report released on Wednesday, June 17.

The mentioned large-cap bank stocks, according to the brokerage, appear to have reasonable valuations in context to earnings outlook. "These banks stand out due to their strong balance sheets, healthy PCR, and relatively better growth prospects, which are expected to enable a steady earnings trajectory. Over FY26-28, we estimate a 21% earnings CAGR for private banks and an 8% CAGR for PSBs," noted the brokerage in its report.

"ICICIBC, HDFCB and SBIN are our top large-cap picks. In mid-sized banks, we prefer AUBANK," read the Motilal Oswal report.

ICICI Bank Share Price Target

ICICI Bank stock received a 'Buy' rating with a target price of Rs 1,750 per share. ICICI Bank share price today closed marginally higher at Rs 1336.25 per share on BSE with a market capitalisation of Rs 9,58,409.91 crore on Wednesday, June 16.

HDFC Bank Share Price Target

HDFC Bank stock received a target price of Rs 1,100 per share. HDFC Bank share price today closed 0.27% higher at Rs 786.8 per share on BSE with a market capitalisation of Rs 12,11,487.04 crore.

State Bank of India Share Price Target

SBI stock had a 'Buy' rating with a target price of Rs 1,300 per share. SBI share price ended the session in green at Rs 1025.6 per share on BSE with an Mcap of Rs 9,46,692.14 crore.

AU Small Finance Bank

AU Small Finance Bank stock ended Wednesday's trading session marginally lower at Rs 1022 per share. The brokerage gave a target price of Rs 1275 per share.