There are few banking stocks with strong fundamentals to invest in the market. Their outlook is looking better after the quarterly results. Some of these stocks are such, which are cheap in terms of price.
There are few banking stocks with strong fundamentals to invest in the market. Their outlook is looking better after the quarterly results. Some of these stocks are such, which are cheap in terms of price. The price of those shares is less than Rs.100. DCB Bank, IDFC First Bank and Union Bank of India are included in this list. The brokerage house has given investment advice on the shares of these banks. The target that the brokerage has set for them, from the current price, they can get returns of up to 53 percent. Let us tell you that the December quarter has been better for the banking sector. The sector is showing good growth and this momentum is expected to continue.
DCB Bank
Brokerage house ICICI Securities has given investment advice in DCB Bank. The brokerage has given a target of Rs 130 for the stock. Whereas the current price of the share is Rs 85. In this sense, investing now can give a steady return of 53 percent. In the December quarter, the bank’s standalone income declined by 2.68 per cent year-on-year but increased on a quarterly basis. At the same time, the stomach of the bank has been Rs 75.37 crore.
According to the brokerage, DCB Bank is improving in core operating performance, although there are concerns about asset quality. Asset quality concerns are due to higher provisions. Financials have been better on the back of net revenue growth. The business of the bank is returning to normal. Management expects gross slippage to normalize in the next two quarters. Monthly slippage run rate is approaching the precovid level. However, brokerage house Motilal Oswal has given a neutral rating and has given a target of Rs 100 in it.
IDFC First Bank
Brokerage house ICICI Direct has given investment advice in IDFC First Bank and has set a target of Rs 65. In terms of current price of Rs 47, it can give 38 percent return. The brokerage says that the financials of the bank will be better due to the lower credit cost. Bank’s balance sheet is getting stronger, CI ratio is improving. Asset quality is getting better. GNPA declined 31 bps on a quarterly basis to 3.96 per cent in the December quarter. The restructured book is at 2.6 per cent. NII grew 36 per cent year-on-year, while NIMs grew by 14 bps on a quarterly basis and stood at 5.9 per cent. Provisions also declined by 17 per cent on a quarterly basis, while PAT increased by 117 per cent year-on-year to Rs 281 crore.
Union Bank of India
Brokerage house Motilal Oswal has given investment advice in Union Bank of India and has given a target of Rs 65 for the stock. In terms of current price of Rs 48, it can give 37 percent return. According to the brokerage, the bank has seen better growth in the December quarter due to loan growth and provision control. Strong loan growth was seen due to higher disbursement in the corporate and MSME sectors. Growth has also been stable in retail, agri. The asset quality of the bank has improved. There has also been a good recovery from stressed assets. Net NPA may come down to 2.2 per cent in FY23E. The credit cast for FY23/FY24 is expected to be 1.8%/1.6%. While RoA/RoE may remain at 0.8%/14% till FY24E.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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