Sunny Agrawal, Head of Fundamental Research at SBI Securities, recently shared his outlook on key Indian banking stocks, highlighting continued strength in ICICI Bank Ltd and expected outperformance from Axis Bank Ltd among larger private-sector lenders. Agrawal also pointed to select mid-sized banks, including Karur Vysya Bank Ltd and Ujjivan Small Finance Bank Ltd, as attractive options.
Leadership and Outperformance in Tier-1 Banks
During an interaction with Business Today, Agrawal emphasized that ICICI Bank has been a clear outperformer and is projected to maintain its leadership position. He described the stock as a stable choice for investors looking to add a banking component to their portfolios.
For those seeking exposure to another prominent private lender, Agrawal identified Axis Bank. He believes this lender is poised to continue its strong performance in the market.
HDFC Bank's Valuation and Recovery Timeline
Regarding HDFC Bank, Agrawal noted that the stock is currently trading at a reasonable valuation. However, he cautioned that a significant recovery could take an estimated two to three quarters. Investors with a longer investment horizon may consider HDFC Bank, while those aiming to build positions over the next three to six months might find ICICI Bank and Axis Bank more immediately appealing.
Strength in Mid-Sized and Small Finance Banks
Agrawal also expressed a preference for certain mid-sized banks. He highlighted Karur Vysya Bank, which delivered robust financial results during the recent quarter and is expected to outperform going forward.
Among small finance banks, Ujjivan Small Finance Bank stood out to Agrawal, having also posted solid numbers in the first quarter (Q1 FY27). He estimated Ujjivan SFB's fair value at approximately Rs 85, suggesting that investors might consider allocating a small portion of their portfolios to the stock with this price target in mind.
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.