Bank stocks in focus: Why brokerages are bullish on ICICI Bank, Kotak Mahindra, BoB, IndusInd?

Following the overall weak sentiment in the domestic market, the banking index moved in tandem with the frontline index and in the red. In the 12-stock index, five were trading positively with Federal Bank, ICICI Bank, Bank of Baroda, Punjab National Bank and IndusInd Bank being the gainers.

Banking stocks are in the radar of many top brokerages with large caps including ICICI Bank, IndusInd Bank among the top favourites.

Kotak Mahindra Bank: Upside 13%  

Morgan Stanley is also bullish on Kotak Bank shares and maintains an 'Equalweight’ rating. The stock has been recommended at a price of Rs 1966 for a price target of Rs 2215.  An upside of 13 per cent is seen in this stock. Kotak Bank shares were trading at Rs 1,950.50 on the NSE today and were down by Rs 15.40 or 0.78 per cent.

The optimism is on the back of sharp improvement in margins over the past year which is likely to continue going forward, the brokerage noted. The loan growth remains strong with no significant moderation. Asset quality benign and best it has been in many years, the brokerage said. Among negatives operating costs remain elevated.

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 Bank of Baroda – Upside 20% 

Meanwhile, Bank of America maintains a buy on Bank of Baroda with a price target of Rs 190. It was recommended at a price of Rs 163. It sees a sustainable credit growth potential of 13-15 per cent. At 0.75x P/B, risk-reward is very attractive, BofA said. It is a fit candidate for re-rating as investor perception improves, the brokerage house said.

 Among negatives, Morgan Stanley mentioned management’s concerns on upside risk to its 12 per cent YoY loan growth guidance for FY23. The brokerage, however, remains overweight on the counter with a price target of Rs 195. Margin Expansion remains on track, this brokerage noted adding that the asset quality remains strong.

ICICI Bank: upside 36 per cent 

Morgan Stanley remains overweight on ICICI Bank with a price target of Rs 1250. The stock has been recommended at a price of Rs 914. The stock was trading at Rs 917.95, up 0.48 per cent.

IndusInd Bank: Upside 20% 

Goldman Sachs maintains a buy on Indusind Bank. The brokerage has cut the target from Rs 1389 to Rs 1377. It was recommended at a price of Rs 1144. The stock was trading flat at Rs 1,144.20.  

Credit:Vainavi Mahendra

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)