Banking stocks have given stellar returns in the past year. In fact, the Nifty Bank Index gained more than 26% in the past year and reached a fresh 52-week high of 44151.80 points recently. Gains in banking stocks have also provided buoyancy to the headline indices.
Here are two banking stocks to buy for an upside of up to 49%:
Karur Vysya Bank
Shares of Karur Vysya Bank appreciated to the tune of 10.39% on Wednesday’s early trades to reach a fresh 52-week high of ₹ 116.20 apiece. At 01:30 PM, its shares were quoting at ₹ 104.10 apiece, up 6.61%.
In the past year, its share price has risen from ₹ 43.30 to ₹ 104.10 to give multibagger returns of 140.42%. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.04 lakhs today!
The Bank reported a 58.25% increase in its net profit to ₹ 337.82 crores for the January to March quarter of 2023 (Q4FY23), against ₹ 213.47 crores in the corresponding quarter of the previous year (Q4FY22). Its total income increased by 7.77% to ₹ 2,169.13 crores in Q4FY23 from ₹ 2,012.71 crores in Q4FY22.
For the entire year (FY23), its net profit increased by 64.29% to ₹ 1106.09 crores, against ₹ 673.27 crores reported in the previous year. Similarly, its total income climbed by 20.74% to ₹ 7,675.49 crores in FY23 against ₹ 6,356.73 crores in FY22.
Emkay Global has a buy rating on the shares of Karur Vysya Bank with a price target of ₹ 155.00 apiece. This translates to an upside of ₹ 48.89% as compared to its current share price of ₹ 104.10 apiece. The brokerage expects KVB to deliver a healthy RoA/RoE of 1.5-1.4%/15% over FY24-26E.
Bank of Baroda
The bank’s net profit grew by a whopping 158.68% to ₹ 5,255.17 crores in the January to March quarter of 2023 (Q4FY23), as compared to ₹ 2,031.55 crores in the corresponding quarter of the previous year. Its total income grew by 44.76% to ₹ 32,528.06 crores in Q4FY23 against ₹ 22,470.46 crores reported in the corresponding quarter of the previous year.
For the entire year (FY23), its net profit increased by 89.88% to ₹ 14905.20 crores, against ₹ 7,849.69 crores reported in the previous year (FY22). Similarly, its total income climbed by 26.20% to ₹ 110,777.98 crores in FY23 against ₹ 87,780.19 crores in FY22.
In the past two years, the bank’s share price increased from ₹ 80.80 to the current level of 185.60, giving multibagger returns of 129.70%. Therefore, if an investor would have invested
₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.29 lakhs today!
Morgan Stanley has an overweight rating on the stock with a target price of ₹ 240. This translates to an upside of 29.31% as compared to its current share price of ₹ 185.60.
Written by Simran Bafna
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