Top Bank Stocks In India: Often we hear that the Banking sector of a country is the backbone of its economy. It not only assist the people by safekeeping their money but also help the government in various financial activity.

Guess what, instead of just keeping your money with them, you can also invest in these institutions! In this article, we will take a look at top bank stocks in India. Keep reading to find out!

Industry overview

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46 foreign banks, 56 regional rural banks, 1485 urban cooperative banks, and 96,000 rural cooperative banks in addition to cooperative credit institutions As of September 2021, the total number of ATMs in India reached 213,145.

Public vs Private Banks in India - Which is performing better?

In view of the pandemic, Bank credit growth remained subdued on account of a lack of demand. However, since November 2020, there were signs of credit revival alongside green shoots of recovery in economic activity.

This was facilitated by favourable liquidity conditions and a gradual unlocking of the economy.

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How to analyze Banking stocks?

Before investing in stocks, it is imperative that investors should do proper research on the fundamentals of the company. The banking business is different from other businesses. 

There are different parameters that should be considered. Apart from the traditional ratios, some of the key metrics to be looked for are:

Net Interest Income (NII): It is the difference between interest earned from a bank’s lending activities to its customers and the interest paid to account holders. If the spread between interest earned and interest expenses rises, it will help NII to rise and vice versa. This measure will give us a good idea about the principal business of the bank.

CASA Ratio: It is a ratio of deposits in current and savings accounts to total deposits. A higher CASA ratio is desired because banks give a low rate of interest in savings account (3-4%) deposits and no interest in current account deposits. A high CASA ratio indicates a lower cost of funds.

Credit Deposit Ratio (CDR): It is the ratio of how much a bank lends out of the deposits it has mobilized. There is no prescribed ideal ratio however, a very low ratio indicates banks are not making full use of their resources.

Top Bank stocks in India- Private 

1. HDFC Bank Ltd.

Bank Stocks in India - HDFC
Face Value (₹): 1ROE (%): 16.5
Market Cap (Cr): 823,470 CrNet Profit Margin: 24.78
EPS (₹): 65CASA Ratio: 46.08
Stock P/E (TTM): 22.85Credit Deposit Ratio (CDR): 88.87
Dividend Yield (%): 0.44Promoter’s Holdings (%): 25.8

(Source: Trade Brains Portal)

It is India’s largest private sector bank by assets and the world’s 10th largest bank by market capitalization as of April 2021. The bank has three key business segments: Wholesale Banking Services, Retail Banking Services, and Treasury.

It was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issue the Mastercard Maestro debit card as well. Its American depositary receipts (ADRs) are listed on the NYSE issued through JP Morgan Chase Bank.

The company earned a net profit of Rs 31,833 Cr and a total income of Rs 1,55,885 Cr. Out of this the total interest earned amounted to Rs 1,28,552 Cr.

The company has seen strong growth in its net cashflows and net profit margin which is a good indication. However, the promoters have been reducing their stake in the company but the promoters pledge remains zero. The gross nonperforming asset stood at 1.32% for HDFC.

2. ICICI Bank Ltd.

Bank Stocks in India - ICICI Bank
Face Value (₹): 2ROE (%): 14.85
Market Cap (Cr): 548,072 CrNet Profit Margin: 22.84
EPS (₹): 32CASA Ratio: 46.17
Stock P/E (TTM): 24.62Credit Deposit Ratio (CDR): 82.48
Dividend Yield (%): 0.25Promoter’s Holdings (%): 0

(Source: Trade Brains Portal)

ICICI Bank Limited is an Indian multinational bank and financial services company. It has a network of 5,275 branches across India and has a presence in 17 countries.

It offers a diversified portfolio of financial products and services to retail, SME, and corporate customers. The company has played a major role in establishing premier institutions such as CRISIL, NCDEX, and CIBIL. 

On the financial side, ICICI logged a  Net profit of Rs 18,384 Cr while it earned a total revenue of Rs 1,61,336 Cr. Out of this interest income amounted to Rs 89,163 Cr in FY21.

The cash flow from core operations and net profit margin are positive as they have seen growth YOY. It must be noted that ICICI is one of the few companies with zero promoters holding. The gross non-performing loans in the retail portfolio were 3.04% of gross retail loans.


3. Kotak Mahindra Bank Ltd.

Kotak Logo
Face Value (₹): 5ROE (%): 13.12
Market Cap (Cr): 368,509 CrNet Profit Margin: 30.17
EPS (₹): 54CASA Ratio: 60.47
Stock P/E (TTM): 34.16Credit Deposit Ratio (CDR): 90.43
Dividend Yield (%): 0.05Promoter’s Holdings (%): 25.99

(Source: Trade Brains Portal)

It is India’s third-largest private sector bank by assets and by market capitalization as of November 2021. Kotak offers banking products and financial services in the areas of personal finance, investment banking, life insurance, and wealth management.

On the financial side, the company generated total revenue of Rs 56,815 Cr out of which interest income amounted to Rs 32,819 Cr in FY21. In the same year, it posted a net profit of Rs 9,990.20 Cr.

The company has been able to use its assets efficiently which has resulted in an increase in net profit margin over the last 2 years. Recently the promoters have been reducing their stake in the company.

However, the promoter’s pledge remains zero. The gross NPA ratio for the bank is 3.2%. 

4. Axis Bank Ltd

Axis Bank Logo
Face Value (₹): 2ROE (%): 7.64
Market Cap (Cr): 237,174 CrNet Profit Margin: 11.21
EPS (₹): 41CASA Ratio: 44.84
Stock P/E (TTM): 18.76Credit Deposit Ratio (CDR): 89.75
Dividend Yield (%): 0Promoter’s Holdings (%): 9.71

(Source: Trade Brains Portal)

Axis Bank Limited, formerly known as UTI Bank, offers retail, corporate and international banking services. It has the largest ATM network among private banks in India. Axis It maintained a leadership position with a 17% market share in UPI transactions & 16% in Mobile Banking for FY21. 

The bank reported a total income of Rs 80,848 Cr and a net profit of Rs 7,195.50 cr. The Net Interest Income grew 16% YOY to 29,239 crores. The profit margins of the company are increasing.

The current declining cash flow from core activities and decreasing promoters holdings can be a reason for concern  Apart from that, the Gross nonperforming ratio stood at 3.70% which is the highest among its peers.

List of all Bank stocks in India – Private Sector

CompanyMarket Cap (Rs in Cr)
HDFC Bank830,593.35
ICICI Bank562,411.52
Kotak Mahindra374,074.26
Axis Bank239,612.48
IndusInd Bank71,422.63
IDBI Bank51,611.53
Bandhan Bank51,398.90
AU Small Financ42,283.81
Yes Bank33,523.46
IDFC First Bank29,498.19
Federal Bank21,074.01
City Union Bank10,717.14
RBL Bank9,013.48
Equitas Bank6,399.48
CSB Bank4,447.31
Karur Vysya4,105.04
JK Bank3,745.54
Ujjivan Small3,309.72
DCB Bank2,673.32
Karnataka Bank2,037.14
South Ind Bk1,858.35
Suryoday Small1,470.30
Dhanlaxmi Bank376.23

Top Bank stocks in India – Public

1. State Bank Of India

Bank Stocks in India - SBI Bank
Face Value (₹): 1ROE (%): 10.13
Market Cap (Cr): 480,456 CrNet Profit Margin: 8.73
EPS (₹): 32CASA Ratio: 45.4
Stock P/E (TTM): 16.77Credit Deposit Ratio (CDR): 67.3
Dividend Yield (%): 0.74Promoter’s Holdings (%): 57.6

(Source: Trade Brains Portal)

SBI is an Indian multinational public sector bank and financial services statutory body. In the Indian Banking sector, SBI has a 23% market share by assets and a 19.77% share in the loans and advance market. It also ranked 43rd on the largest bank in the world list in 2020. 

The company reported the highest ever standalone net profit of Rs 20,410 crores in FY21 with a Net Interest Income of  Rs 1,10,710 crore which saw a healthy growth of 12.87% over the previous year.

The cash flow and profit margins of the company are also rising. Promoters pledge is zero and the gross NPA declined from previous years and stood at 4.98%.

2. Bank of Baroda

Bank Of Baroda logo
Face Value (₹): 2ROE (%): 1.98
Market Cap (Cr): 55,618 CrNet Profit Margin: 1.96
EPS (₹): 7CASA Ratio: 39.8
Stock P/E (TTM): 14.6Credit Deposit Ratio (CDR): 72.62
Dividend Yield (%): 0Promoter’s Holdings (%): 63.97

(Source: Trade Brains Portal)

Bank of Baroda (BOB or BoB) is an Indian nationalized banking and financial services company. BOB provides retail banking, Rural and Agri banking, corporate banking, insurance, and mutual fund services. 

It is the 4th largest nationalized bank in India with a 132 million customers base. 

The net interest income of the company was Rs 28,809 Cr whereas the net profit was Rs 829 Cr in FY21. The company’s profit margins are rising but the cashflows still remain weak. The promoter’s pledge is zero and the gross nonperforming assets ratio stood at 8.87%. 


3. Punjab National Bank

Bank Stocks in India - PNB bank
Face Value (₹): 2ROE (%): 2.98
Market Cap (Cr): 45,751 CrNet Profit Margin: 2.63
EPS (₹): 4CASA Ratio: 44.45
Stock P/E (TTM): 10.83Credit Deposit Ratio (CDR): 61
Dividend Yield (%): 0Promoter’s Holdings (%): 73.15

(Source: Trade Brains Portal)

Punjab National Bank (PNB), is an Indian nationalized bank. It is the second-largest government-owned bank in India, both in terms of its business volumes and its network with over 180 million customers.

It offers services including corporate and personal banking, industrial finance, agricultural finance, and international finance. 

The financials of the company look good as the bank earned a net profit of Rs 2,562 Cr in FY21 which was a significant increase from the previous year. The total income was Rs 94,990 Cr and the Net Interest Income was Rs. 30,477 Cr.

The profit margins and cash flows have been rising as well. The promoter’s holding is strong with zero shares pledged.  The gross nonperforming assets ratio stood at 14.12% which is the highest among its peers.

4. Bank of India

Bank of India Logo
Face Value (₹): 10ROE (%): 5.54
Market Cap (Cr): 22,303 CrNet Profit Margin: 5.38
EPS (₹): 6CASA Ratio: 36.63
Stock P/E (TTM): 8.91Credit Deposit Ratio (CDR): 58.44
Dividend Yield (%): 0Promoter’s Holdings (%): 81.41

(Source: Trade Brains Portal)

Bank of India (BOI) is an Indian nationalized bank that offers services such as Retail banking and NRI banking. It is the first among the nationalized banks to establish a fully computerized branch and ATM facility in Mumbai. The bank is also a founder member of SWIFT in India.

In FY21, the total income of the company was Rs 48,350 cr and the profit earned by them amounted to Rs 2,082.75 Cr. The margins of the company have increased significantly and so have the cashflows.

The company has zero promoters pledge. One of the red flags for the company can be the high-interest payments compared to earnings. The standalone gross nonperforming asset for the company is 13.77%. 

List of all Bank stocks in India – Public Sector

BanksMarket Cap (Rs in Cr)
Bank of Baroda40,063.67
Bank of India22,774.62
IDBI Bank21,738.99
Canara Bank17,452.68
Allahabad Bank13,826.18
Corporation Bk12,557.82
UCO Bank11,963.57
Union Bank11,574.20
Indian Bank9,791.37
Oriental Bank8,913.21
Syndicate Bank8,614.75
Central Bank7,199.73
Bank of Mah7,163.65
United Bank7,123.37
Andhra Bank6,043.59
Punjab & Sind1,444.94
UTI - Gold448.11

In conclusion

India’s digital lending is estimated to reach US$ 1 trillion by FY23 driven by the multi-fold increase in digital disbursements.

In addition to that, by 2025, India’s fintech market is expected to reach Rs. 6.2 trillion (US$ 83.48 billion). This presents a huge opportunity for investors to invest in this growing segment. That’s all for the article on top bank stocks in India. Happy Investing!

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