Banking stocks have led the rebound in Indian equities since late February. The benchmark Nifty has gained around 9 per cent since late February owing to strong inflows from foreign institutions and on hopes of a favorable outcome from the forthcoming General Elections. The Bank Nifty has outperformed the benchmark slightly with about 12 per cent returns. While the recent Supreme Court judgment quashing Reserve Bank of India’s February 12 circular is expected to have some bearing on the banking ..
THE MARKET has not factored in several positives for ICICI Bank in the recent time owing to concerns on corporate governance. The private lender has strengthened its deposit franchise over time, resulting in competitive cost of funds, lowering need to take risks on the asset side. The bank has also improved capital efficiencies over time by lending to better rated entities and capitalizing on their large presence to boost the retail loan book. Further, ICICI Bank is currently trading at a discou ..
THE STOCK which had taken a beating in 2018 is well poised to deliver good returns over next one year. Two of the biggest investor concerns in the stock have now been addressed. The first one being appointment of an external candidate Ravneet Gill as the next MD & CEO while the second is clean chit from the RBI in terms of divergence. We believe the focus will now shift to timing of raising capital and strategy of new management. While loan growth will likely moderate during the transition p ..
THE CURRENT market environment seems conducive for corporate lenders and larger public sector banks. SBI is an exciting play in this category with healthy loan book growth and moderation in fresh slippages in the asset quality front. The Supreme Court ruling on RBI norm is definitely negative for banking sector however it may not materially impact SBI’s asset quality in a near term as bulk of the stress assets have already been recognized. The state-owned lender is also placed very well in terms ..
WE CONTINUE to be positive on HDFC Bank as India is still an under-penetrated market in the retail segment. The asset quality of the lender looks good with lower non-performing assets (NPA). Any rate cuts by the Reserve Bank of India (RBI) will also help HDFC Bank especially in the consumer loans category. We expect HDFC Bank to grow at 20-25 per cent rate in the next one year even as the overall Indian banking industry grows at 13-14 per cent. The stock could give 15-20 per cent returns in the ..
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