ICICI Securities names Kotak Mahindra Bank, Bajaj Finance among top financial picks

Résumé détaillé

The brokerage prefers public sector lenders and diversified NBFCs, while favoring transmission companies over generation firms in the power sector.

ICICI Securities has identified Kotak Mahindra Bank and Bajaj Finance as top picks in the financial space, citing strong growth trajectories and attractive valuations.

Pankaj Pandey, Head of Retail Research at the brokerage, outlined a preference for diversified non-banking financial companies (NBFCs) and public sector banks, while also highlighting near-term risk-reward opportunities in ITC.

Within the largecap banking space, Kotak Mahindra Bank is the preferred choice with a target price of ₹540. The lender is comfortably delivering a 22% to 24% compounded annual growth rate (CAGR). Trading at 2.1 times book value, the stock is positioned for a valuation catch-up now that its leadership transition is resolved. HDFC Bank also offers valuation comfort, but its growth remains lower than that of its private sector peers.

Public sector undertaking (PSU) banks offer significant room for upside, supported by gross and net non-performing assets (NPAs) sitting at two-decade lows. Moderating bond yields—which have eased from 7.5% to 7.1% —are bolstering treasury income. Additionally, with 68% of their loan books linked to the repo rate, these lenders benefit from rate hikes. Margins are expected to improve by 14 to 15 basis points (bps) across most banks. State Bank of India (SBI) remains the top public sector pick, projected to deliver a 1% return on assets (RoAs). Indian Bank is another strong candidate, generating a 1.3% return on assets, making any weakness a buying opportunity.

In the consumer segment, ITC has implemented nearly 90% of its expected price hikes, with further increases anticipated this quarter. This pricing action is expected to drive improvements in cigarette earnings from the fourth quarter onwards, building on the 14% growth seen in the previous quarter.

"While we don't expect ITC to sort of deliver great in terms of growth, the valuations are definitely appealing, which is why we feel like from a risk-reward perspective, it is a good stock to buy at…

Shift…

Début de l'article, extrait de CNBC-TV18. Pour lire la suite, ouvrez l'article chez le média.