Best Stocks for investing : India’s BFSI (Banking, Financial Services and Insurance) sector is not only pushing the country’s economic stream strongly, but is also proving its strength and stability despite global challenges. Now that the economy is gaining momentum again, great opportunities are also emerging for investors in this sector.
Mirae Asset Capital Markets (India) Pvt. Ltd. has identified the top 6 stocks in the BFSI sector in its recent report, which promise not only great growth but also stability for investors.
So let’s know about those major banks and financial companies, whose stocks have the potential to give tremendous returns in the long term!
ICICI Bank (CMP: ₹1,301, TP: ₹1,505)
ICICI Bank is consistently performing well, and its credit growth is 18%, while GNPA (Gross Non-Performing Assets) is only 2.6%, which reflects its strong risk management capability. The bank has reported another strong quarter, leading the brokerage to give it a BUY rating for the long term. The target price has been raised to ₹1,505, which suggests the stock could deliver a return of around 16% in the long term.
State Bank of India (CMP: ₹834, TP: ₹1,010)
India’s largest public sector bank, SBI, has also performed well. Its GNPA ratio is 2.5% and deposits have seen steady growth. SBI has reported good results in Q2, and its business and asset quality have improved. The bank has projected credit growth at 14-16% for FY25E. The brokerage has given it a BUY rating and raised the target price to ₹1,010, which suggests the stock could deliver a return of 21% in the long term.
Bank of Baroda (CMP: ₹247, TP: ₹300)
Bank of Baroda (BoB) has performed strongly in Q2. Its NIM (net interest margin) and credit cost have been in line with the bank’s estimates. The bank has reported a 7% loan and 4% deposit growth quarter-on-quarter. The brokerage has given it a BUY rating for the long term, and raised the target price to ₹300, which could give the stock a return of 21% in the long term.
Federal Bank (CMP: ₹212, TP: ₹212)
Federal Bank has improved its NIM and raised fee income to boost the bank’s earnings. Its credit cost is at 30 bps, one of the best in the sector. The brokerage has given its stock an ‘ADD’ rating, and views its stable growth prospects positively.
Aadhar Housing Finance (CMP: ₹422, TP: ₹555)
Aadhar Housing Finance reported a 5% quarterly growth in AUM (assets under management). The company has projected loan disbursement and AUM growth for FY25E at 18-20% and 22-24%, respectively. Also, the company plans to open 70-75 new branches this fiscal. The brokerage has given it a BUY rating and raised the target price to ₹555, which could give the stock a return of 31% in the long term.
Shriram Finance (CMP: ₹3,021, TP: ₹3,675)
Shriram Finance reported a 4% growth in AUM and a 5% growth in profit in Q2. The company is making good use of new product sales and branch network to grow its AUM. The brokerage has given ADD rating to its stock and raised the target price to ₹ 3,675 in the long term, which can give a return of 18% in the long term.
(Disclaimer: Investment in the stock is advised by the brokerage. Investment in the market is subject to risks. Consult your advisor before taking any investment decision.)
