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ICICI Direct Bullish On 2 Large Cap & 1 Midcap PSU Banking Stocks, Assigns Buy
ICICI Direct in its January 7, 2022, published Banking & Financial Services report has picked 3 stocks from PSU Banking Sector. These 3 stocks are the State Bank Of India, Bank Of Baroda, and Indian Bank. The brokerage assigns buy on these stocks with an attractive valuation for high returns in 2023. Here are the key takeaways of the stocks:
1. State Bank Of India (SBI)
ICICI Direct has a "Buy" on the stock of DBI with a target price of Rs 750/share. The stock is currently trading at Rs 605.40/share on NSE, 0.79% above the previous close. Its 52 week high is Rs 629.55% and its 52 week low is Rs 425% on NSE, respectively.
If you buy the stock today at the current market price, it would likely give you a return of 24% considering the given target price. SBI is a large-cap PSU banking stock with a market capitalisation of Rs 5,36,056 crore.
The stock has fallen 2.13% in the last 1 week, however, it surged 11.79% in the last 3 months. It grew 22.16% in the last 1 year. It gave 88.29% in the past 3 years and 96.07% in the last 5 years, respectively.
According to the brokerage, Robust loan growth of 17-18% YoY to Rs 3135200 crore is expected to continue in Q3FY23 while estimated deposit growth at 10% YoY to stay keeping cost of funds elevated. Overall NII growth is seen at ~18% YoY due to high base in Q2FY22. We expect slippages at ~Rs 4000 -5000 crore. Overall NPA provisions are seen at Rs 4500 crore. Investment provisions write-back may not be seen this quarter with yields stable. Expect strong profit growth to Rs 12560 crore, up 49% YoY
2. Bank Of Baroda (BoB)
The brokerage has assigned buy on the stock with a target price of Rs 220/share. The stock is currently trading at Rs 184.40/share on NSE, 0.22% above the previous close. Its 52-week low is Rs 83.25% and its 52-week high is Rs 197.20% on NSE, respectively.
The brokerage claims a 20% upside in the share price if you buy today at the current market price keeping the given target price in focus. BoB is 2nd biggest PSU bank in India with a market capitalisation of Rs 94,791.07 crore. It is a large-cap stock.
The stock in the last 1 week has fallen 1.32% and in the last 3 months, it grew 35.85%, respectively. It moved up 1.09.82% in the last 1 year and 88.9% in the last 3 years, respectively. It gave 11.73% positive returns in the last 5 years.
According to the brokerage, Bank of Baroda is expected to report loan growth in line with industry trend. For Q3FY23, we expect overall loan growth of 17.5% YoY and 2.8% QoQ. We may see some dip in growth of retail & agri segment but corporate loan segment is expected to propel growth. Overall deposits should grow 12.8% YoY at Rs 11.0 lakh crore. NII is estimated to grow 18.7% YoY to Rs 10147 crore. NIMs are expected to inch up to ~3.4%. Provisions should see a decline both QoQ and YoY, resulting in 49.9% YoY jump in PAT at Rs 3294 crore. CI is likely to increase to ~52.5%, mainly due to wage revision. Slippage ratio is expected to remain largely steady while GNPA is further expected to decline ~10 bps QoQ.
3. Indian Bank
ICICI Direct has placed a buy call on the stock with a target price of Rs 335/share. The stock is currently trading on NSE at Rs 296.90/share, 1.18% above its previous close. The stock's 52 week low is Rs 130.90/share and the 52-week high is Rs 306/share on NSE, respectively.
The brokerage claims a potential upside of 13% from its current level considering the given target price. Indian Bank is a midcap PSU Banking stock with a market capitalisation of Rs 36,584.83 crore.
In terms of return on investments over the past 3 years, it has given positive returns, however, it gave 21.4% negative returns in 5 years. In the past 1 month, it surged 8.95% and in the past 3 months, it surged 46.37%, respectively. In a year it gave 106.07% multibagger returns and 198.84% multibagger returns in the last 3 years.
Disclaimer
The stock has been picked from the brokerage report of ICICI Direct. 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.
