Experts are positive on these below-100 stock prices, from Yes Bank to PNB to IDFC First Bank

Stocks to buy: Following a more than 21% increase in the Bank Nifty index in 2022, retail investors are unsure if the current boom in banking stocks will last or if it’s time to book profits and consider other themes for the upcoming year. If we believe the opinions of market analysts, the uptrend in mid-sized PSU bank stocks and tech-enabled lenders in the private sector might continue beyond 2023. They claimed that as a result of the Indian government’s initiative to address bad loans, banks are anticipated to post solid quarterly results over the medium to long term, and PSU banks are anticipated to compete with private banks in the banking industry.

Stock market specialists also stated that because of the dollar index’s ease, large corporations now find it more expensive to borrow money abroad. As a result, these corporations are returning to Indian banks for credit lines. Additionally, in the medium to long term, this will benefit PSU banking stocks. Banks like Axis Bank, ICICI Bank, HDFC Bank, and IDFC First Bank are anticipated to profit from such an emerging business model in India. However, in the private sector, those banks that have focused on tech-enabled lending will outperform their competitors.

Experts advised ordinary investors to acquire mid-sized PSU and private bank stocks if they wanted to take advantage of the prospects in the banking sector but had a limited amount of money to invest. They advised buying shares of Yes Bank, PNB, IDFC First Bank, Bank of Baroda, etc.

In support of the medium- to long-term banking theme, Sandeep Pandey, a Business Partner at Emkay Global Financial Services, stated: “The proposal of the Finance Ministry to handle bad loans through ARC will have a significant impact on the Indian banking industry. The system is currently giving those lenders who are struggling with problematic loans a window of opportunity. Now, a bad loan won’t compel any bank to keep provisioning and endure NPA stress for very long.”

According to a former deputy vice president of HDFC Bank Ltd., the central government’s bad loan strategy has given state-owned banks the tools they need to compete with private competitors. Therefore, the market is optimistic about PSU banks because they are priced far lower than their private sector competitors.

According to Chandan Taparia, a Derivative & Technical Analyst at Motilal Oswal, there are several reasons why bank stocks will keep rising: “Large corporations moved abroad for credit lines as a result of the rising US dollar, but they are now anticipated to return to the Indian banking system as the US dollar has weakened.” The margins of Indian banks will benefit from this. In addition, the high-interest rate environment will benefit Indian banks. Therefore, one should keep investing in banking stocks because the long-term success of the bank theme depends on banks’ profitability and margins, which are predicted to increase over the medium to long term.

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Axis Bank, ICICI Bank, HDFC Bank, and IDFC First Bank shares are anticipated to remain in the spotlight since tech-enabled private lenders are predicted to benefit more than their counterparts.

Sandeep Pandey of Emkay Global Financial Services suggested Yes Bank to high-risk investors because the bank has been growing since SBI took over its management “Investors who are willing to take a high level of risk should consider Yes Bank stock because it stands to gain significantly from the Finance Ministry’s initiative to address bad loans. In the following four to five years, the stock might rise to $60 per share, giving Yes Bank stockholders a return of at least 200%.”

stock picks for today

Saurabh Jain, Vice President — Research at SMC Global Securities, offered the following advice on banking stocks to buy today: “In PSU banks, one can look at SBI, Canara Bank, and Bank of Baroda whereas, in private sector banks, my advice is to look at Axis Bank, ICICI Bank, and HDFC Bank, if the perspective is for medium to long term.”

Regarding equities for retail investors with a little investment budget, Chandan Taparia of Motilal Oswal suggested IDFC First Bank and Bank of Baroda. If the client has a high-risk tolerance, Yes Bank may also be a decent medium- to long-term investment.

Founder and Director of Proficient Equities Manoj Dalmia stated, “On bank stocks to buy below 100,” “At current prices, small retail investors can purchase shares of Bank of Maharashtra and Punjab National Bank (PNB). PNB’s stock price is anticipated to reach double digits over the long run, while Bank of Maharashtra’s stock price may increase to $40 a share in the short to medium term, providing owners with a return of more than 30%.”

Disclaimer: Mint does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any financial decisions, we suggest investors to consult with licensed professionals.