2 Sensex stocks hit 52-week highs today; should you buy, hold or sell?

BFSI stocks Kotak Mahindra Bank Ltd and Bajaj Finance Ltd hit their fresh 52-week highs on Monday, thanks to a recent rally that pushed Nifty Financial, a gauge for financial stocks, 5.8 per cent higher in the past one week. Stock analysts tracking the two stocks said while the overhang of the management change is behind Bajaj Finance, Kotak Mahindra bank also look attractive, given it is expected to outperform peers in terms of loan growth and is seen reporting strong return on asset (ROA) ahead.

Shares of Kotak Mahindra Bank Ltd hit a 52-week high of Rs 2,149.65 today against its previous one-year high of Rs 2,096. The banking stock hit record high of Rs 2,252.45 on October 27, 2021.

Bajaj Finance hit its one-year high of Rs 9,090.50 today. It made a record high of Rs 11,760.05 on August 2, 2016.

In the case of Bajaj Finance, a host of brokerages are positive on the stock. Bajaj Finance has finally elevated Rajeev Jain as Vice Chairman for a period of three years. He remains in an executive position. There were concerns about the possible exit of Rajeev from Bajaj Finance, after the end of his tenure in March 2025. This may have posed risks associated with managing transition.

"This has finally ended the overhang of its management change," Kotak Institutional Equities said. Anup Saha is promoted as Managing Director of Bajaj Finance, while Atul Jain will keep heading Bajaj Housing Finance, it said.

The succession has been executed well, continuity of the leadership reinforces the investors’ confidence, said Sharekhan. The brokerage said Bajaj Finance is expected to outperform peers in terms of growth and return ratios and this makes it an interesting play in quality large cap space.

Citi recently suggested 'Buy' on the NBFC as it raised its target price on the stock to Rs 10,200 apiece. BofA Securities has 'Buy' and a target of Rs 10,500 on the stock. CLSA sees Bajaj Finance at Rs 11,000. It retained its 'Outperform' rating on the scrip. In the case of Jefferies, the brokerage suggested a price target of Rs 9,270 on Bajaj Finance.

Within financials, Goldman Sachs likes Kotak Mahindra Bank due to its strong return on asst (ROA) despite elevated credit costs, healthy loan growth and profitability.

"With the ban now lifted, KMB is well-positioned for business growth, and a pickup in consumer business will help limit margin decline. We estimate a healthy 16 per cent loan CAGR over the next two years, with RoA sustaining at 2.2 per cent," said MOFSL as it reiterate 'Buy' on the stock. This brokerage expects Kotak Mahindra Bank to deliver better loan growth against peers. RoE differential has also narrowed with KMB holding steady, while valuations appear more reasonable, it said.

MOFSL said while FY26 may begin on a softer note for BFSI space, with earnings expected to continue decelerating in 1H, it believes that the visibility of earnings recovery for banks, margin tailwinds for NBFCs as the sector pivots back to growth, and a gradual recovery in Capital Markets — supported by valuations — will provide attractive investment opportunities over the year.