For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

7 Private Sector Banking Stocks Likely To Rally, Motilal Oswal Says Buy For High Returns

|

Leading brokerage firm ICICI Direct initiates buy on 7 quality Private sector banking stocks. These stocks are AU Small Finance Bank, Axis Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, and IndusInd Bank. The brokerage claims gain up to 33% from their current level if you buy the stock at the current market price.

 

1. AU Small Finance Bank

1. AU Small Finance Bank

Motilal Oswal recommends "buy" the stock with a target price of Rs 725/share. If you buy the stock at the current market it would give you up to 16% return. The stock last traded at Rs 625.80/share on NSE after falling 1.62%. Its 52 week low is Rs 525/share and its 52 week high is Rs 732.98/share on NSE.

It is a midcap Small Finance Bank with a market capitalisation of Rs 41,595 crore. The stock has given 7.24% positive returns in 1 year, 58.13% in 3 years and 78.94% in 5 years, respectively.

According to the brokerage, Expect margin to compress slightly to ~6.1%. CoF and C/I ratios expected to remain high. Expect business growth to remain healthy. Asset quality and movement in restructuring to be key.

2. Axis Bank
 

2. Axis Bank

The stock of Axis Bank rated a "buy" by Motilal Oswal with a target price of Rs 1,130/share. If you buy the stock at the current market price, it could give you up to 21% returns. The stock is last traded at Rs 939.90/share on NSE, having fallen 1.02%. Its 52 week low is Rs 618.25/share and 52-week high is Rs 970/share, respectively.

It is a large-cap banking stock having a Market capitalisation of Rs 2,88,683 crore. In the past 1 year, it gave 28.7% positive return and 29.96% in 3 years, respectively. It gave a maximum 66.87% positive return in the past 5 years. 

According to the brokerage, Expect credit costs and slippages to remain stable. Moderation in cost ratios to be closely monitored. Margin to witness expansion; Traction in deposits to be key. Expect business growth to see healthy traction.

3. Federal Bank

3. Federal Bank

Motilal Oswal assigns a "buy" on the stock with a target price of Rs 160/share. It claims 19% potential upside from its current level. The stock last traded at Rs 134.60/share on NSE, down 1.54% from its previous close. Its 52 week low is Rs 82.50/share and its 52 week high is Rs 142.25/share, respectively.

Federal Bank is a mid cap banking stock having a market capitalisation of Rs 28,313.24 crore. The stock has given 49.47% positive return in 1 year. It has given a maximum 54.54% positive return in 3 years. In the past 5 years, it gave 20.07% positive return.

According to the brokerage, Expect business growth to see a healthy traction. Expect credit costs to stay steady on exposure to SMEs. Asset quality and loans under restructuring are key monitorables. Expect NIM to improve slightly to ~3.4%; Watchful of commentary on the cost of funds going ahead.

4. HDFC Bank

4. HDFC Bank

The brokerage assigns buy on the stock with a target price of Rs 1,900/share. It claims a potential upside of up to 17% from its current level. The stock is currently trading at Rs 1,594.40/share on NSE, down 0.33% from the previous close. Its 52 week high is Rs 1,722.10/share and its 52 week low is Rs 1,271.60/share, respectively.

It is a large-cap banking stock with a market capitalisation of Rs 8,85,617 crore. The stock has moved up 3.55% in the past 1 year, whereas in 3 years it moved up by 28.48%. In the past 5 years, it gave maximum 71.11% positive returns. 

According to the brokerage, Expect business growth to see continuous traction. Margin expansion will be an important metric; Deposit traction to be closely monitored. Asset quality in Agri/Unsecured book and slippages among other key monitorables. Commentary around Credit Cards, traction in fee income, and the merger with HDFC are key monitorables.

5. ICICI Bank

5. ICICI Bank

Motilal Oswal initiates a buy on the stock with a target price of Rs 1,150/share. The brokerage sees a 33% jump in the share price from the current price considering the given target price. The stock last traded at Rs 870.10/share on the NSE, down 1.03% from the previous close. Its 52 week low is Rs 642.15/share and its 52 week high is Rs 958.20/share, respectively. 

 
With a market capitalization of Rs 6,05,272 crore, it is a large cap banking stock. The stock has given negative returns in the past few months, However, in 1 year it gave 10.83% positive return, in 3 years it gave 65.51% positive return and in 5 years it gave 178.08% multibagger returns. 

According to the brokerage, Expect loan growth to see healthy traction and margin to witness expansion to 4.4%. Expect credit costs to remain stable and slippages to moderate. Traction in deposits and rise in cost of deposits to be key. Traction in credit card and overall business to be key.

6. IDFC First Bank

6. IDFC First Bank

The brokerage rated the stock a "Buy" for a target price of Rs 70/share apiece. According to the brokerage, if you buy the stock at the current market price, it could fetch 18% gains. The current market price (CMP) of the stock is Rs 59.50/share on NSE, 1.41% down from its previous close. Its 52 week high is Rs 64.30/share and 52 week low is Rs 28.95/share, respectively.

It is a midcap banking stock having a market capitalization of rs 37,003.56 crore. It has given 19.48% positive returns in 1 year. It gave a maximum 36.31% in the 3 years. It gave 2.15% positive return in the past 5 years. 

According to the brokerage, Expect loan growth to see healthy traction led by healthy trends in Retail and Commercial Finance. Expect credit costs to remain stable and asset quality to witness steady improvement. Traction in deposits and rise in cost of deposits to be key. Margin to remain healthy at 6.0%.

7. IndusInd Bank

7. IndusInd Bank

Motilal Oswal assigns buy on the stock of IndusInd Bank with Rs 1,450/share target price. It claims 33% potential upside from its current level. The stock on NSE last traded at Rs 1,181.90/share, down 2.79% from its previous close. Its 52 week high is Rs 1,275.80/share and its 52 week low is Rs 763.20/share, respectively.

It is a large-cap banking stock with a market capitalisation of Rs 91,609.38 crore. The stock moved up 28.23% in 1 year. However, in 3 years it has fallen 19.57% and in 5 years it has fallen 30.4%, respectively.

According to the brokerage, Expect loan growth to see a healthy pickup; deposit traction would be closely monitored. Expect asset quality to remain under watch; Slippages from MFI and restructuring book to be key monitorables. Expect margin to remains under pressure at ~4.1%. Credit costs to witness a gradual moderation as PCR remains healthy.

Stocks, Target Price, SMP, Potential Upside

Stocks, Target Price, SMP, Potential Upside

Name of StockTarget PriceCMPPotential Upside (in%)
AU Small Finance BankRs 725Rs 625.8016
Axis BankRs 1,130Rs 939.9021
Federal BankRs 160Rs 134.6019
HDFC BankRs 1,900Rs 1,594.4017
ICICI BankRs 1,150Rs 870.1033
IDFC First BankRs 70Rs 59.5018
IndusInd BankRs 1,450Rs 1,181.9023
Disclaimer

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.

Story first published: Friday, January 6, 2023, 20:50 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X