Top 3 Large Cap Banking Stocks You Should Buy, Recommended By Major Brokerages

3 top brokerage firms namely ICICI Securities, Axis Securities & Motilal Oswal are bullish on three major banking stocks, SBI, Axis Bank & IndusInd Bank. Brokerage in their recently published reports suggests 'buy' for potential gains over 40%. These 3 banking stocks are large-cap stocks, and they have a huge market reach in terms of customers.

State Bank Of India (SBI)

The Current Market Price (CMP) of SBI stock is Rs. 458.90/share, it was opened at Rs 489/share. The stock's 52-week low was recorded on August 23, 2021, at Rs. 401.25 per share, and its 52-week high was recorded on February 7, 2022, at Rs. 549 per share, respectively.

Investors can anticipate potential gains of 45% if the shares of the bank are bought at the CMP, which is below the brokerage's predicted target price of Rs 665/share. It is a large-cap banking stock with a market capitalization of Rs 4,22,535 crore.

The stock has given positive returns over the past 5 years, early 73.78%. In the past 3 years, it gave a return of 31.32%, and past 1 year 12.45, respectively. On short-term investments of 1 month, it has positive returns of 5.04%, however, on 3 months it has given negative returns of 5.48%.

Axis Securities in its report on SBI published on 30th June 202 said, "The bank's asset quality performance has been consistently better than which resulted in credit cost normalization. We believe SBI's unsecured lending profile is strong with >90% for salaried government employees. Furthermore, retail book traction at 15% remains healthy, supported by home loans, and Xpress credit cards, and we expect further improvement in the upcoming quarters. Currently, the bank's market share in Home loans and Auto Loans is over 20%. Among PSU banks, SBI with its healthy PCR, robust capitalization, strong liability franchise, and improved asset quality outlook, remains the best play on the gradual recovery of the Indian economy. We believe normalization in credit costs and improved growth outlook should lead to double-digit ROEs of ~14-15% over FY23-24E. We maintain BUY on the stock with a target price of Rs 665/share (SOTP basis core book at 1.3x FY24E and subsidiaries at Rs 185), implying an upside of 45% from the CMP."

Axis Bank

Axis Bank's Current Market Price (CMP ) is Rs 667.05/share, gained 1.37% from its previous close of Rs 658.15/share. Today it was opened at Rs 667/share. The 52-week low of the stock is Rs 618.25, while the 52-week high is Rs 866.90/share. It touched the 52-week low recently on 23 June 2022.

According to the ICICI Securities report published on July 2, 2022, the stock's target price is Rs. 1050 a share. The estimated target price and current market price indicate that the stock is projected to increase by almost 58%. The market cap of Axis bank is Rs 2,06,394 crore. It is a large-cap banking stock.

Axis Bank's share price has fallen 15.73% in the past 3 months. However, in the past 1 month, it has given positive signs and given returns of 1.71%. The shares of the bank have witnessed a fall in price in the past 1 year, nearly 11.21%, and 14.44% in past 3 years. However, it has given positive returns in past 5 years of 33.13%.

The bank Citi's India consumer business transition and integration process is progressing well and remains well on track. Transaction closing is expected by Q4FY23 and full integration 18 months thereafter. GPS strategy execution progressing well with 19 large transformational projects.

According to the ICICI Securities, "In FY22, non-retail term deposits had risen 58% to Rs1.65trn, constituting >20% of overall deposits and top 20 depositors constituting 10% (vs 7.9% in FY21). Retail TD grew merely 4% to Rs2.87trn. Retail liability strategy is centered around granularisation, premiumisation and deepening of the deposit base. In FY22, it added 8.6mn (up 29% YoY) new liability relationships with over 4.3mn new SA relationships (53% higher YoY)."

IndusInd Bank

IndusInd Bank's Current market price as on 08 July at the time of writing is Rs 847.10/share, opened at Rs 867/share. Today, it declined 1.61% from the previous close of Rs 861/share. The stock's 52-week low is Rs 763.20/share recorded on 23 June 2022, and 52 week high is Rs 1,242/share recorded on 28 October 2021, respectively. The market capitalization of IndusInd Bank is Rs 66,698.50 crore.

Motilal Oswal is bullish on the IndusInd Bank, with the estimated target price of Rs 1300/share. The stock has the potential to gain nearly 54% in 12 months according to the brokerage, considering the Target price if the investor buys the stock at the CMP.

IndusInd Bank in past recent times, in past 1 week has given a positive return of 5.88%. It has not performed well in the past 1 year as it give negative returns of 18.25%, in 3 years it gave a negative return of 42.11% and in 5 years it gave a negative return of 44%, respectively.

Motilal Oswal in its report on IndusInd Bank published on 04 July 2022 said, "IndusInd Bank continued to report a strong pick-up in loan growth and we expect this trend to remain healthy which is likely to support margins. Deposit franchise is growing steadily, with sustained focus in ramping up of Retail deposits. Improvements in asset quality, particularly in the MFI book, and CV demand outlook will be the key monitorables. We maintain our BUY rating with a Target Price of Rs 1,300 (premised on 1.7x FY24E ABV)."

Banking Stocks - SMP- Target Price & potential Gains

Banking stocks	CMP	Potential Gains	Target Price	Estimated by
SBI	Rs. 458.90	45%	Rs 665	Axis Securities
Axis Bank	Rs 667.05	58.00%	Rs. 1050	ICICI Securities
IndusInd Bank	Rs 847.10	54.00%	Rs 1300	Motilal Oswal

Disclaimer

The stocks have been picked from the brokerage reports. 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 taking any investment decision.