Banks, Financial Services Q3 Preview- Healthy Credit Offtake Led By The Positive Festive Sentiments: KRChoksey

KRChoksey Research Report

Banking

Banks are expected to see a deliberate deviation in the share of unsecured loans after the Reserve Bank of India risk weight announcement. We will remain watchful of the management commentaries in regard to this and its growth outlook going forward.

We remain positive on the overall banking sector, especially HDFC Bank Ltd. (2.5 times FY25E price/adjusted book value), ICICI Bank Ltd. (2.4 times FY25E price/adjusted book value), and State Bank of India (1.3 times FY25E P/ABV), which remain our top picks for Q3 FY24E.

Non- banking companies

The non-banking financial company sector has been outperforming market expectations over the last few quarters, resulting in an impressive re rating of prices during M9 FY24E, KRiven by robust business performance across all financial metrics.

We will closely monitor the trends of the shift in product mix in the coming quarters.

We continue to like Bajaj Finance Ltd. (5.8 times FY25E price/book value) and Poonawalla Fincorp Ltd. (2.3 times FY25E P/BV) for their brand equity and strong market positioning.

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