Global brokerage firm Nomura has highlighted ICICI Bank, SBI, Kotak Mahindra Bank, and Federal Bank as its top picks in the banking sector ahead of the Q1FY25 results.
Key Points:
- Top Picks: ICICI Bank, SBI, Kotak Mahindra Bank, and Federal Bank.
- Ratings and Target Prices:
- ICICI Bank: Buy, Target Price ₹1,335
- Kotak Bank: Buy, Target Price ₹2,000
- SBI: Buy, Target Price ₹1,000
- Federal Bank: Buy, Target Price ₹195
- Growth Expectations:
- ICICI Bank and Kotak Mahindra Bank: Expected to report over 16% YoY loan growth.
- Federal Bank: Notable for strong loan and deposit growth among mid-sized banks.
- SBI: Expected to maintain strong loan growth of 16% YoY.
Loan-to-Deposit Ratios (LDR):
- The chosen banks have the lowest LDRs among Nomura’s coverage.
- Banks with higher LDRs have shown slower loan growth trends.
Net Interest Margins (NIMs):
- Private Banks: Expected to see gradual NIM compression due to moderation in CASA and re-pricing of term deposits.
- PSU Banks: Expected to see lower QoQ NIM moderation, supported by re-pricing of MCLR linked loans and stable LDRs.
Nomura’s analysis indicates these banks are well-positioned for growth and stability in the upcoming financial quarter.
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