Stocks to buy: ICICI Bank, IndusInd Bank and SBI - top stock picks among banks from Motilal Oswal ahead of Q4 results
Deposit growth, too, has gathered pace on the back of aggressive competition, a push for deposits, and competitive TD rates offered by banks. As a result, the gap between credit and deposits narrowed to 3.4% in March 2024.
Among the banks, brokerage firm Motilal Oswal Financial Services expects ICICI Bank, Axis Bank and Kotak Mahindra Bank to see a 7-11 bps moderation in NIM, while it expects flat NIMs for HDFC Bank, RBL Bank, SBI, IndusInd Bank and Union Bank of India. AU Small Finance Bank is expected to see a substantial moderation in NIMs.
Also Read: Banking sector Q4 preview: PSU Banks to continue to post better earnings growth than private banks, says Elara For Q4FY24, the broking firm estimates net interest income (NII) for its banking coverage universe to grow 7.4% YoY and 2.9% QoQ (excluding HDFC Bank), while controlled opex and modest treasury gains (amid moderation in bond yields) will enable 1.6% YoY and 5.5% QoQ growth in pre-provisions operating profit (PPoP) (excluding HDFCB). For 4QFY24, it estimates earnings growth of 12% YoY for PSU banks and 14% for private banks (6% excluding HDFC Bank).
Also Read: Stocks to buy: HUL, BEL, IDFC First Bank among 12 stocks that can rise 8-15% in next 3-4 weeks, say analysts ICICI Bank, IndusInd Bank and State Bank of India (SBI) are among top picks in the banking sector from Motilal Oswal ahead of Q4 results. ICICI Bank is transitioning into a growth leader in the SME and Retail segments, supported by ongoing investments in technology and strategic partnerships with new ecosystem players.
Motilal Oswal estimates an 18% CAGR in loans over FY24-26. The bank has the potential for re-rating, driven by its consistent delivery of strong return ratios and sustained growth,
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