ICICI Bank performed best in calendar year (CY) 2021 and the brokerage expects this trend to continue in CY22 as well. “Improved quality of earnings should continue to drive ICICI rerating,” CLSA said.
SBI: The brokerage said the bank will benefit from improving asset quality and a turning rate cycle. It showed a good performance in CY21 and we expect this to continue in CY22, it added.
HDFC Bank: CLSA expects the FY23/24 earnings of the bank to grow a steady pace at 20 percent YoY. “The stock remains a strong compounder,” it said but added, “we still prefer ICICI to HDFC Bank.”
Axis Bank: “Following CY21 de-rating, we see more favourable risk/reward,” CLSA said. It added while the bank may lag ICICI on franchise metrics; “on an absolute basis we expect ROEs at more than 15 percent.” Its valuation stands at 1.25x FY24 book, which the brokerage said, “looks undemanding.”
Kotak Mahindra Bank: The bank is likely to be India’s fastest-growing large-cap bank as it gains share in mortgages and unsecured credit, CLSA said. It added the bank’s valuations are again getting reasonable.
HDFC Ltd: CLSA said its mortgages are picking up, “but the best of mortgage spreads may be over with a turning rate cycle.” The brokerage, however, prefers “large banks to HDFC Ltd.”
Bajaj Finance: We recently initiated coverage at SELL as growth is expected to slow versus historic levels and the growth differential with peers should narrow.
IndusInd Bank: CLSA has lowered IndusInd Bank’s target price to Rs 1,200 from Rs 1500.
Bandhan Bank: The brokerage has lowered the target price to Rs 245 from Rs 270 on account of lower multiples, but it has retained estimates and ratings.
