Buy 6 Top Banking Stocks In October Ahead Of Diwali For Gains Up To 61%, Says HDFC Securities

HDFC Securities is bullish on these 6 leading banking stocks and suggests "buy" ahead of the festive season. The brokerage suggests buying the 6 banking stocks which include Axis Bank, Bandhan Bank, City Union Bank, Federal Bank, ICICI Bank, and State Bank Of India (SBI) in October. HDFC Securities sees a potential upside of up to 62% from its current level considering the given target price.

According to the brokerage, with nearly 40% of floating rate loans anchored to the repo rate, banks have witnessed accelerated monetary transmission on the lending side through a combination of real-time pass-through and more frequent resets, resulting in steeper increase in WALR at 41bps compared to a deposit cost spike of 26bps. "Despite near-term NIM reflation, we believe that banks will be increasingly faced with a trade-off between margins and asset quality over the next 12-18 months," the brokerage has said.

Stocks, CMP, Target Price & Potential Upside

Stocks	CMP (in Rs)	Target Price (in Rs)	Potential Upside (in %)
Axis Bank	816.35	1043	28
Bandhan Bank	270.6	435	61
City Union bank	193.35	242	26
Federal Bank	132.3	144	9
ICICI Bank	896.9	1087	22
State Bank Of India	562.45	652	16

1. Axis Bank

Axis bank is the leading private-sector bank in India. With a market cap of Rs 2,50,736 crore, it is a large- cap banking stock. The brokerage has given a buy with an upgrade target price of Rs 1,043 per share for 28% potential gains.

The stock on Tuesday, 18 Oct' closed at Rs 866.90 per share on NSE. Its 52-week low is Rs 618.25 and its 52-week high is Rs 866.90, respectively.

The stock has given 3.92% of positive return in the past 1 week, whereas, in the past 1 month it has given 3.43% of positive return. Over the past 1 year, the stock has given 0.38% positive return. It has given 15.05% and 75.75% positive returns in the past 3 and 5 years, respectively. 

2. Bandhan Bank

Bandhan Bank is a mid-cap bank headquartered in Kolkata. It is a private-sector bank having a market cap of Rs 42,587.88 crore. HDFC Securities has given a buy call to the stock with an upgraded target price of Rs 435 per share for gains of up to 61% from its current level. 

The stock's current market price (CMP) is Rs 270.60 per share on NSE. Its 52-week low is Rs 229.55 and its 52-week high is Rs 349.55, respectively.

In the past 1 week, the stock has surged 2.66%, whereas, in the past 1 month, it has fallen 6.3%. Over the past 1 year, it has given 18.48% negative return, and 51.22% negative return in the past 3 years. It was listed on the stock exchange in March 2018, and since then it has given 43.25% negative return on investments. 

3. City Union Bank

City Union Bank Ltd is a private sector scheduled commercial bank with a major presence in urban semi-urban and rural centres in South India. It is a small-cap stock having a market cap of Rs 14,299.87 crore. The brokerage has estimated a target price of Rs 242 per share. It sees a potential upside of up to 26% from its current level considering the given target price. 

The current market price (CMP) of the stock is Rs 193.35 per share on NSE. Its 52-week low on NSE is Rs 109, and its 52-week high is Rs 195.30, respectively. 

The stock in the past 1 week has surged 9.45% and 8.47% in the past 1 month, respectively. In the past 1 year, it has given a positive return of 13.07%, and in the past 3 years, it has given a negative return of 10.3%, respectively. In the past 5 years, it has given a positive return of 33.22%, respectively. 

4. Federal Bank

Federal Bank is another private sector mid-cap bank having a market cap of Rs 27,829.43 crore. The brokerage has given a buy call to the stock with a target price of Rs 144 per share. The stock with the given target price is likely to surge 9% from its current level.

The stock's current market price (CMP) is Rs 132.30 per share on NSE. Its 52-week low is Rs 78.60, while its 52-week high is Rs 133.70. 

 The stock has surged nearly 8.09% in the past 1 week and 8.84% in the past 1 month, respectively. It has given 28.45% positive return in the past 3 months. In the past 1 year, it has given 38.82% positive return, 57.5% in 3 years and 4.63% in the past 5 years, respectively. 

5. ICICI Bank

ICICI Bank is India's one of biggest private sector banks with a network of 5,534 branches and 13,379 ATMs across India. It has a market cap of Rs 6,23,915crore. The brokerage suggests buy the stock with a target price of Rs 1,087 per share for a potential gain of 22%. 

The stock's current market price (CMP) is Rs 896.90 per share on NSE. Its 52 week low is Rs 642.15 and 52 week high is Rs 936.65, respectively. The stock touched its fresh 52 week high in September 2022. 

It has given 20.32% positive return in the past 1 year. The stock over the 3 years has given a multibagger return of 104.87%. Whereas, in the past 5 years, it has given a multibagger return of 240.83%. 

6. State Bank Of India (SBI)

State Bank Of India Or SBI is a Public Sector Bank and India's largest bank with Pan India Presence. With a market cap of Rs 5,01964 crore, it is a large-cap bank. The brokerage has given a buy call to the stock and sees a potential upside of up to 16% with a target price of Rs 652 per share. 

The stock's last trading share price is Rs 562.45 per share on NSE. Its 52 week low is Rs 425 and its 52-week high is Rs 578.50 per share. 

The stock in terms of returns has performed well over the years. In a week, the stock surged 6.65% and in the past 3 months around 14.72%, respectively. Over a year, the stock has given 12.95%. In the past 3 years, it has given 108.59% and in the past 5 years, it has given 130.75% positive returns on investments.

Disclaimer

The stocks have been picked from the brokerage report of HDFC Securities. 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 check with certified experts before making any investment decision.