The markets opened in red on Tuesday as the benchmark NIFTY50 index fell 0.20% or 35 points. As of 12:10 IST, the 50-basket index was trading at 17,206 points. In the last year, the index has declined 741 points or 4.13%.
Contrast this with the performance of the banking industry during the same period. NIFTY Bank which houses the most liquid and large Indian banking shares has advanced 3.42% in the last twelve months to touch the 39,109 points mark.
Presented below are bankings stocks offering an upside of up to 42% over the next 12 months:
Axis Bank Ltd.
- Current Market Price: Rs. 794
- Target Price: Rs. 1,130
- Upside: 42%
- From: BNP Paribas
With a market capitalization of Rs. 245,000 crores, Axis Bank is India’s fourth largest private sector bank. It proves the entire value chain of financial services to customer segments including large and mid-corporates, MSME, agriculture and even retail businesses. It has a vast pan-India presence with 4,758 domestic branches and 10,990 ATMs.
BNP Paribas has given a ‘buy’ rating on the Axis Bank stock with a target price of Rs. 1,130 per share. This results in an impressive upside of over 42% for the investors.
IDFC First Bank Ltd.
- Current Market Price: Rs. 53
- Target Price: Rs. 70
- Upside: 32%
- From: Axis Securities
Formed after the merger of erstwhile IDFC Bank and erstwhile Capital First, IDFC First Bank is a leading tech-driven bank with a customer base of more than 7.3 million and growing. It has a well-diversified lending portfolio with more than 20 business lines. The bank has a strong capital adequacy ratio of 16.74%.
Its earnings have been volatile after the merger but there are green shoots visible with improving returns and stellar profits of Rs. 352 and Rs. 485 in the March and June quarters of 2022 respectively.
Brokerage firm Axis Securities has initiated a ‘buy’ rating for IDFC Bank with a target price of Rs. 70. This translates into prospective gains of 32% for the investors.
The analysts at Axis Securities believe that a reduction in the high-risk infrastructure loan book to 5% in FY22 and healthy loan book growth of 20-25% over FY23-25E will drive strong operating performance with asset quality improvement.
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