Sign In
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
Kolkata: Many Indian banks are in the pink of their health and it includes both public sector and private sector. Global brokerage major JPMorgan expects returns from the banking sector to rise significantly in the period FY26-FY28. The points is has highlighted include stability of liquidity and shedding of NPAs from books of accounts. Let's have a closer look at the top picks in the banking stocks by JP Morgan.
JP Morgan is neutral on India's largest private sector bank. It has given a target price of Rs 1,105. JP Morganrecognises the bank's operational strength. But it also notes that its loan-deposit ratio at 98% signals an imbalance which could limits growth flexibility. JPMorgan wants to see more robust deposit mobilization while admitting loan growth has been strong. RoA should to show a sustained move toward the 2% level.
JP Morgan is Overweight on ICICI Bank, the second biggest bank in the country's private sector. Target rice for this bank is Rs 1,650. JP Morgan said this bank has demonstrated one of the most consistent operating performances. ICICI Bank, it said does not merely chase volumes but grows by managing risk. ICICI seems to be appropriately positioned to benefit from the pause in the rate-cut cycle, the brokerage said. It said the earnings estimates are stable, RoA is robust and JPMorgan said the valuation gap as a penalty that is not warranted by the bank’s fundamentals.
JP Morgan is Overweight on Kotak Mahindra Bank. It has assigned a target price of Rs 2,625. According to the brokerage, the bank has a powerful earnings trajectory and it expects 20% plus earnings CAGR from FY26 to FY28. It books of accounts are very clean and has a CASA ratio and abundant capital. It also said that the wealth management and AMC businesses of the bank are growing in significance as more and more people are putting their savings into market-related financial instruments. However, the brokerage has cautioned against expensive acquisitions.
JP Morgan is Overweight on IDFC First Bank. The brokerage has assigned a target price of Rs 100. According to the broking house, IDFC First is a restructuring case that has transitioned to a cleaner operating phase and its credit costs are declining and RoA is improving. Equally important, growth is picking up across retail and commercial segments. IDFC First Bank is also attracting steady deposits. It thinks the market is yet to rerate the stock as the investors are still stuck in its transition period. JPMorgan expects the valuation to improve.
JP Morgan is Overweight on this small finance bank and has set a target price of Rs 1,126. It thinks that the SFB is moving into a phase of RoA expansion since credit costs have started falling. The bank is also recording loan growth. JP Morgan thinks this bank can generate alpha. The bank's profitability remains strong for a lender of its size. It is also showing credit discipline while expanding a diversified retail book. JPMorgan has flagged earnings gains and valuation expansion as positives.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.)
