Mirae Asset Capital Markets (India) has come out with a report on 10 banking and financial institutions that it believes offer strong growth potential and stability. They included ICICI Bank, HDFC Bank, State Bank of India (SBI), Bank of Baroda, Bajaj Finance and Shriram Finance, among others.
The domestic brokerage said the BFSI sector offers a mix of stability and growth opportunities, adding that large banks such as ICICI Bank, HDFC Bank and SBI remain market leaders while growth-oriented financial companies like Bajaj Finance, Cholamandalam, and Shriram Finance provide strong prospects for diversification.
"Investors are advised to adopt a stock-specific approach, focusing on companies with robust fundamentals, strong liability franchises, and scalable business models for long-term gains," it said.
ICICI Bank | Target price: Rs 1,505 Mirae Asset Capital Markets said ICICI Bank remains its top pick, as it consistently outperformed peers with its diversified portfolio and strong operational metrics. The bank’s credit growth of 18 per cent YoY and gross non-performing assets (NPA) at just 2.6 per cent reflect sound risk management and sustained profitability, making it a must-have for long-term investors.
HDFC Bank | Target price: Rs 1,950 Mirae Asset Capital Markets India’s largest private-sector bank post-merger with HDFC Ltd, boasts a strong CASA ratio and a well-balanced loan book. Its ability to maintain robust growth in both retail and wholesale lending segments solidifies its position as a market leader, Mirae Asset Capital Markets (India) said.
SBI | Target price: Rs 1,010
Mirae Asset Capital Markets said the largest public sector bank has continued to deliver strong performance with improving asset quality and consistent deposit growth. Its gross NPA ratio of 2.5 per cent and a well-managed loan book underline its resilience in challenging market conditions, it said.
Bank of Baroda | Target price: Rs 300 The domestic brokerage said BOB stands out with its improved operational efficiency and a healthy NIM of 3.1 per cent. Its focus on maintaining a balanced asset-liability mix ensures sustainable growth, making it an attractive option for investors, Mirae Asset Capital Markets said.
Bajaj Finance | Target price: Rs 9,100 Mirae Asset Capital Markets said Bajaj Finance remains a leader in the consumer finance space, supported by its diversified product portfolio and strong digital transformation initiatives. The company’s focus on customer acquisition and retention provides significant growth potential, it said.
Federal Bank | Target price: Rs 240 Federal Bank has continued to excel with an 18 per cent YoY credit growth and a low gross NPA ratio of 2.4 per cent, Mirae Asset Capital Markets (India) said. "Its strategic focus on expanding its retail loan book and improving operational metrics ensures steady returns for investors," it said.
Kotak Mahindra Bank | Target price: Rs 2,250 Mirae Asset Capital Markets said Kotak Mahindra Bank is known for its high CASA ratio (53 per cent) and prudent risk management. With a balanced loan book and a focus on profitability, it remains a stable choice for long-term growth, it said.
Cholamandalam Investment and Finance Company | Target price: Rs 1,530 Cholamandalam Investment is seen as a strong player in vehicle and SME financing, supported by consistent profitability and effective capital utilization. Its ROA of 3.6 per cent underscores its efficient operational model, Mirae said.
Shriram Finance | Target price: Rs 3,675 Shriram Finance has continued to grow with its diversified lending portfolio in vehicle and SME finance. Its focus on maintaining a low GNPA ratio of 3.3 per cent and expanding its non-CV product lines ensures long-term stability.
Home First Finance | Target price: Rs 1,280 Home First Finance leverages its niche in affordable housing loans to drive robust growth, Mirae said. "With stable asset quality and a strong ROA of 3.8 per cent, it is a compelling choice for investors looking for consistent returns in the housing finance segment," it said.