The banking sector can benefit the most from economic recovery. Here after the quarterly results, we have selected 4 such strong bank stocks, which are expected to give good returns going forward.
Best Banking Stocks: New Samvat has started with Muhurta trading on Diwali. The market’s performance last year was excellent and the Nifty is giving around 40 per cent returns. Whereas midcap and smallcap indices have gained 70 to 80 per cent. Market experts are of the opinion that even if Samvat 2078 is not as fast as last year, but investors’ money will be made. There is a recovery in the country’s economy, macro conditions have improved. Demand will increase due to normal monsoon. In such a situation, the benefit of economic recovery can be maximum for the banking sector. Here after the quarterly results, we have selected 4 such strong bank stocks, which are expected to give good returns going forward. In view of their strong fundamentals, brokerage houses have also advised to invest in them.
Brokerage House Motilal Oswal has an investment advice in SBI with a target of Rs 675. The current price of the share is Rs 530. In this sense, it can give 27 percent return. The brokerage house says that the September quarter has been better for SBI. There has been a growth of 67 percent in net earnings on a yearly basis. Provisions are under control. Asset quality has improved. The GNPA/NNPA ratio improved to 42bp/25bp on a quarterly basis and stood at 4.9% and 1.5%. There is an improvement in the loan book. It is expected that the RoE for the bank in FY23E/FY24E may be 14.5% and 15.7%.
Brokerage house ICICI Securities has an investment advice in IndusInd Bank with a target of Rs 1420. The current price of the share is Rs 1189. In this sense, it can give 20 percent return. Private sector bank IndusInd Bank’s profit increased 73 percent year-on-year to Rs 1146.73 crore in the September quarter. At the same time, the total income has increased from 8732 crores to 9488 crores. The interest income has been 7650.36 crores. However, there is still some concern regarding asset quality. There has been a slight increase in NPAs.
Union Bank of India
Brokerage House Motilal Oswal has an investment advice on Union Bank of India with a target of Rs 65. The current price of the share is Rs 49. In this sense, it can give 33 percent return. The brokerage house says that the performance of the bank has been better in the September quarter. There has been recovery from DHFL resolution, which got support. Fee income trend has improved. Asset quality is stable. Loan growth has been sluggish, which has impacted NII growth. The brokerage house believes that the bank’s RoA / RoE may grow at 0.8% and 14.2% till FY24E.
Brokerage House KR Choksey has an investment advice on Axis Bank with a target of Rs 936. The current price of the share is Rs 752. In this sense, 25% return can be given in this. According to the brokerage house, the net interest income of the bank has increased by 8 per cent year-on-year to Rs 7900 crore. The NIM is at 3.39 per cent. The operating profit has been 5928 crores, while the core operating profit has been 5456 crores. Net profit has increased by 86 percent to 3133 crores. The advances of the bank have been growing at 10 per cent year-on-year.
(Disclaimer: The investment advice here is given by the brokerage house. This is not the personal view of dgmartpro Business. Markets are risky, so take expert opinion before investing.)