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Bank Stocks To Buy, Add For 2023: Top 2 Brokerages Initiate Coverage On Bank Stocks For Higher Returns

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Leading brokerages have recommended 2 bank stocks to buy and 1 bank stock to add for good returns. Leading brokerage Anand Rathi has recommended investors to buy HDFC Bank with a target price of Rs 1908 apiece. Meanwhile, Kotak Securities has listed Bandhan Bank to Add (Target Price Rs 280) and ICICI Bank (Target Price Rs 1070 apiece, respectively. Check key takeaways below:

 

1. Buy HDFC Bank

1. Buy HDFC Bank

Anand Rathi has recommended investors to buy HDFC Bank with a target price of Rs 1908 apiece. The current market price of the stock is Rs 1597 apiece. If you buy HDFC Bank now, you can get potential return of 19%. The company has a market capitalisation of Rs 8,90,970.33 crore.

The stock's 52-week high is Rs 1721 apiece and 52-week low 1271 apiece, respectively. The stock's last 5-years return is 70% and 3-years return 23%. In last 1-year, the shares have rallied 11%.

The company for the quarter ended September 30, 2022 declared a consolidated total income of Rs 49,182 crore, up 11%.

According to Anand Rathi, "HDFC Bank already had a huge opportunity with the under-penetration of banking services in the country. The proposed merger adds an entirely different dimension to the future. We believe that the runway is huge. HDFC Bank's earnings trajectory remains on track with continued growth in retail. The ongoing expansion of branch network and cards business, coupled with the merger, is expected to aid long-term growth. Nevertheless, the bank's long-term outlook remains positive. We thereby retain our BUY rating on the stock, with a revised target price of Rs. 1,908."

2. Buy ICICI Bank
 

2. Buy ICICI Bank

Leading brokerage house Kotak Securities has suggested investors to buy ICICI Bank shares with a target price of Rs 1070 apiece. If you buy ICICI Bank now, you can get potential return of 22%.

The last trading price of the stock is Rs 879 apiece with an intraday decline of 1%. The company has a market capitalisation of Rs 6,13,366.40 crore. The stock's 52-week high is Rs 958 apiece and 52-week low is Rs 642 apiece, respectively.

The stock has rallied 177% in last 5-years, 62% in last 3-years, and 20% in last 1-year. The company for the quarter ended September 30, 2022 declared a consolidated total income of Rs 45,178 crore, up 15%.

According to Kotak Securities, "We maintain BUY with FV at Rs1,070 (unchanged). We value the bank at ~2.8X book and 19X September 2024E EPS. We value the subsidiaries at ~Rs175/share. The bank is at a stage where a strong outperformance is unlikely, but we are comfortable to be positive given the strength of its go-to-market strategy. The sector is witnessing comfortable growth and benign credit costs. This implies that the outperformance is likely to be stronger with the weaker franchises."

 

3. Add Bandhan Bank

3. Add Bandhan Bank

Kotak Securities has suggested investors to add stock of Bandhan Bank with a target price of Rs 280 apiece. The last trading price of the stock is Rs 226 apiece with an intraday decline of 2%.

The company has a market capitalisation of Rs 36,541 crore. The shares have rallied 5% in last 1-month and declined 55% in last 3-years.

The company for the quarter ended September 30, 2022 declared a consolidated total income of Rs 4249 crore, down 3%.

According to Kotak Securities, "We maintain ADD with a revised FV of Rs280 (Rs300 earlier). At our Fair Value, we are valuing the bank at 1.6X book and 8X FY2024E EPS for RoEs remaining healthy at ~20% as it recovers from the current Covid cycle. We acknowledge that our positive stance on the stock is getting tested given the delay in recovery, but we believe that there is a strong visibility of improvement in the underlying macro conditions for the bank's target segment. Hence, we would prefer to have this stance rather than wait until the headline print reports this improvement."

 

Disclaimer

Disclaimer

The stocks have been picked from the brokerage reports of Anand Rathi and Kotak Securities. Greynium Information Technologies, the Author, and the respective Brokerage Houses are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

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