Domestic brokerage and research firm Yes Securities ‘top stock picks in the banking space include Axis Bank, SBI, ICICI Bank, Federal Bank and CSB, in that order, it shared in a note.
Sharing its top recommendations, the brokerage said it has Buy ratings on bank stocks Axis Bank with a target price of ₹1,080, State Bank of India (SBI) with target price of ₹725, ICICI Bank (TP: ₹1,120), Federal Bank (TP: ₹135).
It has also suggested to buy CSB Bank with target price of ₹270, HDFC Bank (TP: ₹1,900), IndusInd Bank (TP: ₹1,250), Bank of Baroda (TP: ₹135), Indian Bank (TP: ₹205) and RBL Bank (TP: ₹135).
The brokerage noted that Axis Bank’s market share in net credit cards added had declined to 0.4% in CY20 but has since bounced back to 14.8% in CY21 and improved further to 18.1% in 4MCY22. This is positive from a leading indicator perspective as spends would rise with a lag and, also, lead to improved credit card loan book, it said. Yes Securities had placed Axis Bank as its top stock pick in its most recent banking sector report.
“We note that the market share of Axis Bank in credit card spends had declined from 10.5% in CY19 to 8.8% in CY20 and to 8.5% in CY21. This has inched back up to 8.8% in 4MCY222 and we expect further improvement as cards added see improvement in spend per card with a lag,” Yes Securities’ note added.
Meanwhile, the brokerage has Add ratings on Kotak Mahindra Bank with target price of ₹2,050, City Union Bank (TP: ₹155 and DCB Bank (TP: ₹90).
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.