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Banks (Finance)

CLSA's Top Banking Picks: ICICI Bank, HDFC Bank, and Bandhan Bank

Strategic Insights

— 1 min read

As the Indian banking sector remains in focus, key brokerage houses have issued recommendations on top picks in the sector. CLSA has identified ICICI Bank, HDFC Bank, and Bandhan Bank as its top picks in the banking sector. The brokerage house has increased the target price for HDFC Bank and maintained an Outperform rating on the stock. CLSA also maintains an Outperform rating on ICICI Bank with a target price of Rs 1,700 per share.

Key Takeaways:

  • CLSA has identified ICICI Bank, HDFC Bank, and Bandhan Bank as its top picks in the banking sector, with a focus on growth and profitability.
  • CLSA maintains an Outperform rating on HDFC Bank with a revised target price of Rs 2,300 per share, implying 18% upside from current levels.
  • CLSA forecasts HDFC Bank to deliver 11% loan growth in FY26 and 15-16% thereafter, with a 10 bps moderation in net interest margins in FY26.
  • ICICI Bank is the only bank to report sequential growth in NII despite a sharp rate cut environment, with a target price of Rs 1,700 per share.
  • ICICI Bank's loan growth moderated to 12% YoY, driven by a slowdown in retail loan growth, while the business banking segment continued its strong expansion.
  • Bandhan Bank was identified as a top pick among midcaps, with a focus on its growth prospects and stable asset quality.

Statistics:

  • HDFC Bank's target price is Rs 2,300 per share, implying 18% upside from current levels.
  • ICICI Bank's target price is Rs 1,700 per share, implying 19% upside from current levels.
  • HDFC Bank is forecast to deliver 15% annualised growth on a compounded basis over FY25-FY28.
  • ICICI Bank's NIM, adjusted for one-offs and accounting intricacies, was down only 5 bps QoQ.
  • Gross slippage ratio for ICICI Bank moderated 15 bps YoY to 1.9%.

Sources:

  • CLSA research report, citing the brokerage house's analysis and forecasts on HDFC Bank and ICICI Bank.
  • IE Online Media Services Pvt. Ltd., distributed by Contify.com, citing the CLSA report for its analysis and statistics.

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