These two bank stocks have a potential upside of up to 27%;
1. First Bank IDFC Ltd.
The four business segments of IDFC FIRST Bank Limited are Retail Banking, Corporate, Treasury, and Other Banking Business. The Bank’s investment portfolio, money market borrowing and lending, investment activities, and the entirety of the bank’s foreign currency and derivative holdings comprise the Treasury division.
The shares, which have a market valuation of Rs 54,926.24 crore, closed at Rs 77.69 a share, up 1.77 percent from the previous closing price of Rs 76.34.
With a target price of Rs 96 per share, BoB Capital, a reputable brokerage in India, issued a “Buy” call on the bank stock, suggesting a potential upside of 24 percent from the closing price of Rs 77.69 per share on Thursday.
According to the brokerage, IDFC Bank reduced expensive funds for margin development and instead focused on retail business after merging with IDFC. From FY19 to FY23, advances and deposits increased at a 21% and 27% CAGR, respectively. The current plan is to achieve a CAGR of 20% and 25% for loan and deposits between FY24 and FY29.
Examining the data, the company’s sales climbed from Rs 5,912 crore in Q3FY23 to Rs 7,880 crore in Q3FY24, a 33 percent increase. Net profit increased by 7% over that time, from Rs 617 crore to Rs 732 crore.
2. AU Small Finance Bank Ltd.
Retail banking, wholesale banking, and treasury operations are just a few of the many banking and financial services provided by AU Small Finance Bank Limited. Treasury, retail banking, wholesale banking, and other commercial categories are among its offerings.
The shares, which have a market value of Rs 37,880.13 crore, closed at Rs 566.10 a share, up 1.12% from the previous closing price of Rs 559.85 a share.
Known Indian firm Motilal Oswal issued a “Buy” call on the bank stock, indicating a potential 27 percent upside from the closing price of Rs 566.10 per share on Thursday. The brokerage set a target price of Rs 720 per share.
According to the brokerage, the combination of AUBANK and Fincare is expected to increase AUBANK’s loan portfolio by 16%. The merged company is expected to grow at a strong rate of 25% CAGR and would surpass a balance sheet size of Rs 1.5t by FY25E. Strong performance across product lines is the main driver of the anticipated growth, with areas like house loans, MFI, and commercial loans predicted to increase at a rate of 30% per year.
Examining the data, the company’s sales climbed from Rs 2,118 crore in Q3FY23 to Rs 2,736 crore in Q3FY24, a 33 percent increase. Net profit decreased by 7% over that time, from Rs 393 crore to Rs 375 crore.
