For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Top Brokerages Initiates Buy On 3 Quality Stocks From Banking Sector, Claims High Returns In 2023

|

Three top brokers have placed a buy on three quality banking stocks namely Federal Bank, Axis Bank, & HDFC Bank. According to the brokerage, the stocks are likely to give high returns in 2023. Among these 3 private sector banking stocks, two are large-cap stocks, while one is a midcap stock. Here are the key highlights of the stocks along with the brokerage's views:

 

1. Federal Bank

1. Federal Bank

Axis Securities recommends buy the stock of Federal Bank for a Rs 170/share target price. The stock with the given target price would give a return on investments of up to 25% if purchased at the current market price.

The share price last closed at Rs 136.70/share on NSE, falling 0.94% from the previous close. The stock recently hit its fresh 52 week high at Rs 143.40/share. The stock's 52 week low is Rs 82.50/share.

In the last 1 year, it gave 39.06% positive return. The stock has given a maximum return of 49.24% in the past 3 years. It is a midcap stock with Rs 28,754.97 crore market valuation.

Axis Securities said, "We maintain our BUY recommendation on the stock. FB remains our most preferred pick amongst mid-sized banks with credit growth visibility remaining strong, well-managed asset quality and improving profitability."

 

2. Axis Bank
 

2. Axis Bank

Leading brokerage Bonanza Portfolio has placed a buy on Axis Bank with a target price of Rs 1,053/share. The brokerage claims a potential upside of up to 14% from its current level.

The stock's current market price on NSE is Rs 924/share, up 0.69% from the previous close. The 52 The stock hits a fresh 52 week high in early 2023 at Rs 970/share, while the 52 week low was at Rs 618.25/share.

In the last 1yera, it gave 27.41% positive return. The stock has given maximum 58% return in the past 5 years. It is a large-cap banking stock with a market capitalisation of Rs 2,83,800 crore.

According to the brokerage, Axis bank has demonstrated strong traction in earning growth and robust growth from overall business mix over the last several quarters. Axis bank has been concentrating more on high-yielding loan book. The company looks to sustain the current NIM margin going forward led by focusing loan mix as 68% of loan book is floating in nature, it is well positioned to gain the benefit from the rising the interest rate scenario. OPEX to remain elevated going forward due to continued investment in branch expansion, manpower and digital capabilities which will drive the NII and operating performance of the bank. On assets quality front, slippages to remain controlled that is likely to support the assets quality and keep the credit costs lower. Additional provision buffers provide comfort to the stress from the restructured book. The earnings expansion driver will continue going forward, determined by strong operating profits & lower provisions, consequential in enhanced returns ratios for the bank.

 

3. HDFC Bank

3. HDFC Bank

Brokerage firm IBDI Capital has a buy on HDFC Bank, a leading private sector bank. The brokerage has a buy on the stock with a target price of Rs 2,070/share. If you buy the stock at the current market price it is likely to give a return up to 27%.

The stock last traded at Rs 1,637.30/share on NSE, up 1.77% from the previous close. The 52 week high is Rs 1,722.10/share and 52 week low is Rs 1,271.60/share.

The stock in the last 1 year has surged 7.07%. The stock has given maximum 69.29% returns in the last 5 years. It is a large-cap banking stock with a market capitalisation of Rs 9,13,082 crore.

According to the brokerage, HDFC Bank's credit growth slightly down to 19.6% YoY vs 23.4% (Q2FY23) led by corporate book. Asset quality remains stable as GNPA stood at 1.23% vs 1.23% QoQ led by better recoveries. Annualized slippage ratio stood at 1.75% vs 1.5% QoQ. Restructured assets declined to 0.4% of advances vs 0.5% (QoQ) led by recoveries and write offs. Deposits growth remains strong at 20% YoY. NII grew by 9% QoQ and PPoP grew by 9% QoQ backed by 12% QoQ growth in other income; fee income grew by 8% QoQ. Provisions declined by 13% QoQ resulted into credit cost at 0.75% vs 0.9%. Thus, PAT grew by 15.6% QoQ. "We have moved to FY25E estimates and maintain BUY rating with the new target price of Rs.2,070 (Rs.1,860) based on P/BV of 3.1x FY25. Need to watch out for dispensation on regulatory requirements," the brokerage has said.

Disclaimer

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 consult with certified experts before making any investment decision.

Story first published: Wednesday, January 18, 2023, 20:43 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X