According to brokerage firm Axis Securities, FY23 looks promising for the BFSI sector as most of the banks/NBFCs under the brokerage’s coverage are well-positioned to capitalize on the growth opportunities.
“The outlook on the asset quality front remains encouraging, with slippage moderate and recovery expected to be healthy, leading to an improvement in asset quality. We believe that the growth momentum will remain healthy but a delay in the investment cycle could impact overall growth in the near future.”
Axis Securities believes the asset quality pain is largely behind (barring a few segments) and the restructured book is behaving fairly well, accelerating credit growth and maintaining margins in a rising interest rate environment. The capacity of the bank is likely to increase valuations for banks. /NBFCs on the move.
It has maintained its equal weight on the banking sector. its top stock picks ICICI Bank with a target price of 1,000, State Bank of India or SBI (TP: 665), and Federal Bank Ltd. (TP: 115) There are more buy recommendations on bank stock,
“ICICI Bank is outperforming its peers and has been able to achieve ROAE/ROAA expansion on a strong provisioning buffer coupled with growth, margin and asset quality, high credit growth, improving operating leverage, and a strong deposit franchise. will help. Over FY23-24E. On the valuation front, we believe the bank remains in a comfortable position,” Axis Securities said.
According to the brokerage, among PSU banks, SBI continues to be the best play on the gradual recovery of the Indian economy due to its healthy PCR, strong capitalization, a strong liability franchise and a better asset quality outlook.
“The major positives for Federal Bank are increased retail focus, strong fee income, substantial capitalization and prudent provisioning. We expect stable provisioning requirements with healthy growth in the balance sheet.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.