Banking Stocks: With the expansion of economic activities, the business of banks is also gaining momentum and domestic brokerage firms are betting on some banking stocks including SBI, in which investment can earn 62 percent.
Banking Stocks: Recovering from the aftershocks of the pandemic, economic activities are rapidly returning to pre-Corona levels. With the expansion of economic activities, the business of banks is also gaining momentum and domestic brokerage firms are betting on some banking stocks including SBI, in which investment can earn 62 percent. Here are three such banking stocks that are showing a better investment opportunity.
IndusInd Bank: Motilal Oswal
Current price – Rs 823
Target Price- Rs 1300
- IndusInd Bank’s loan book is strong and the trend is likely to continue in the times to come, which will support margins. Apart from this, there is an improvement in asset quality.
- The deposits of retail/small traders stood at Rs 1.24 lakh in the March 2022 quarter, with a growth of 3 per cent on a quarterly basis. Management is trying to increase it. At present, their share in the total deposits of the bank is about 41 percent.
- In view of this, brokerage firm Motilal Oswal has retained its buy rating at the target price of Rs 1300. Investors can earn 58 percent by buying its shares at the current price of Rs 823 on BSE.
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SBI by Axis Securities
Current price – Rs 472.30
Target Price – Rs 665
- In the financial year 2021-22, the country’s largest bank SBI’s asset quality improved and its slippage decreased by 12.4 percent on an annual basis. The rate at which a bank’s NPAs increase in a financial year is slippage. This being low means that the NPA rate is coming down.
- The capital adequacy ratio of the bank increased from 13.7 percent in the financial year 2020-21 to 13.8 percent in the financial year 2021-22. Capital adequacy ratio means how much risk the bank can bear. Its higher means that the bank is in a financially sound position to bear any loss.
- In view of this, brokerage firm Axis Securities has retained the buy rating of SBI and has kept the target price at Rs 665, which is about 41 per cent higher than today’s closing price of Rs 472.30 on BSE.
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Axis Bank: ICICI Securities
Current price – Rs 646.50
Target Price – Rs 1050
- Non-retail term deposits jumped 58 per cent to Rs 1.65 lakh crore in FY 2021-22. It accounts for more than 20 per cent of the total deposits. The special thing is that 10 percent of the deposits are only from the top 20 people.
- The Bank’s GPS strategy has been effective and is performing optimally in 19 major transformational projects.
- The main focus of the bank is in the Mid-Corporate, Commercial Banking and MNC segment and the annual growth of Mid-Corporate was 45 percent, Commercial Banking 26 percent and MNC’s 49 percent. At the same time, the business of new SME business for the bank increased by 53 percent.
- For all these reasons, brokerage firm ICICI Securities has advised investors to invest at a target price of Rs 1050. Right now its price on BSE is Rs 646.50 i.e. it can earn 62 percent profit.
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)