June 2023 Top Pick: KR Choksey Picks 2 Private Sector Banks With Buy Rating, Sees Up To 22% Gains

Leading brokerage firm KR Choksey has come up with its top picks for June 2023, in which it has picked two leading private sector banks -Kotak Mahindra Bank (KMB) and Axis Bank (AXSB) with "Buy" rating. The brokerage has assigned attractive target prices on the stocks. Considering the given target prices to the stocks, if you buy the stocks at the current market price, they can fetch up to 22% gains.

Kotak Mahindra Bank (KMB)

Buy Stock Of KMB for a Target Price of Rs. 2,330/share

KR Choksey said, "We have factored CAGR of 17.1% in advances and 12.7% in profits over FY23-25E, respectively, and a RoA of 2.3% by FY25E. We expect the premium valuation for KMB to continue with a strong brand equity, positive outlook and consistent performance from a business perspective."

It added, "We maintain our target price at INR 2,330 per share, using SOTP valuation and applying a P/B multiple of 4.0x to the FY25E adj. BVPS of INR 539.6 for the standalone business and INR 170 per share for subsidiaries, leading to an upside of 21.0% over the CMP. We maintain our recommendation of "BUY" on the shares of KMB."

Stock Outlook - On Monday, the stock of KMB closed at Rs. 1,924.90/share, down 0.71% from the previous close of Rs. 1,938.75/share. The stock has fallen 1.45% in the past 1 week. It gave 3.56% positive return in the past 1 year. It has given 43.89% positive return in 3 years and 47.54% positive return in 5 years, respectively.

About - Kotak Mahindra Bank (KMB) offers a diverse profile in financial sector. The bank has gained a lucrative market share with a consistent healthy growth performance leading to strong return ratios. We remain optimistic on the bank given its strong parentage, brand equity, strong liability franchise & prudent risk management.

Axis Bank

Buy Stock of AXSB with a Target Price of Rs. 1,160/share

KR Choksey said, "We have factored CAGR of 18.1% in advances, 19.4% in NII, 21.3% in PPOP, and 79.4% in PAT over FY23-25E, driven by strong trends in business momentum & improving operating performance. We maintain our target price to INR 1,160 per share, applying 2.0x P/ABV multiple to an adjusted book value of INR 580.1 per share. This implies an upside of 22.0% over the CMP. We maintain our rating on the share of AXSB at "BUY"."

Stock Outlook - On Monday, the share price of Axis Bank closed at Rs. 950.85/share, up 2.67% from its previous close. It jumped 2.26% in the past 1 week. In the past 1 year, it gave 40.39% positive return. It gave 134.6% positive return in 3 years and 79.1% in 5 years, respectively.

About - Axis Bank Ltd (AXSB) is one of the largest banks in India, offering financial services to a well-diversified group of customers in the corporate & retail space. The bank has a strong market positioning and an experienced management team.

Disclaimer - The stocks have been picked from the brokerage report of KR Choksey. 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.