1 week ago
ICICI Securities backs HDFC, Kotak, Axis amid banking growth
ICICI Securities thinks banks could perform well even though the economy faces some challenges.
It recommends buying shares of HDFC Bank, Kotak Mahindra Bank and Axis Bank.
It recommends holding shares of YES Bank and Federal Bank.
Banks’ net interest income grew strongly compared with the same period last year.
Public sector banks had fewer bad-loan problems than private banks in the latest period.
Large private banks still faced pressure on their profit margins.
The brokerage expects further growth helped by FCNR (B) deposits in FY27.
It also says that clear leadership plans at HDFC Bank and Kotak Mahindra Bank could make investors more confident.
ICICI Securities retained a positive view on the banking sector despite macroeconomic uncertainties.
The brokerage recommended buying HDFC Bank, Kotak Mahindra Bank and Axis Bank, while holding YES Bank and Federal Bank.
Sector-wide net interest income growth reached an estimated 11% year on year, a multi-quarter high.
Public sector bank slippages were around 0.7%, compared with approximately 1.7% for private banks.
Clarity on managing director and chief executive succession at HDFC Bank and Kotak Mahindra Bank could support sector re-rating.
- Who
- ICICI Securities and the banking-sector lenders discussed in its analysis, including HDFC Bank, Kotak Mahindra Bank, Axis Bank, YES Bank and Federal Bank.
- What
- ICICI Securities issued a positive banking-sector view, recommending buys in three banks and holds in two others while assessing income growth and asset quality.
- Where
- Across India’s banking sector, including private and public sector banks.
- When
- The analysis discusses the latest quarter, year-on-year comparisons and expectations for FY27.
- Why
- The brokerage cited stronger net interest income growth, resilient asset quality and potentially supportive FCNR (B) growth, while noting margin pressure and macroeconomic uncertainty.
Key facts
- Brokerage stance
- ICICI Securities retained a positive view on the banking sector.
- Buy recommendations
- HDFC Bank, Kotak Mahindra Bank and Axis Bank.
- Hold recommendations
- YES Bank and Federal Bank.
- Sector NII growth
- Approximately 11% year on year, described as a multi-quarter high.
- Public-sector slippages
- Approximately 0.7%.
- Private-bank slippages
- Approximately 1.7%, more than twice the public-sector level.
- FY27 outlook
- Healthy NII and earnings-per-share growth is expected, aided by FCNR (B).
Quotes
ICICI Securities
The brokerage providing the banking-sector outlook and analysis
“Retain positive view on sector; MD&CEO succession clarity key Notwithstanding macro uncertainties, we retain our positive stance on the sector.”
businesstoday.in
Sources
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