Bank and financial stocks to buy as listed by Motilal Oswal for gains of up to 30%

Buy Federal Bank, Says Motilal Oswal

Current market price Target price % of earnings
84 € Rs 110 30.95%

According to Motilal Oswal Institutional Equities, Federal Bank gross advances increased 9.7% year-on-year to Rs.1400 billion. The bank announced a strong recovery in business trends with sequential growth of 3.4% (v / sa 1.6% drop in QoQ at 1TFY22 affected by second wave COVID). Growth is largely aided by a recovery in retail assets such as gold, home and auto loans.

According to Motilal Oswal Institutional Equities, the bank continues to maintain a high liquidity coverage ratio (LCR) of 226% (v / s 216% in the first quarter of fiscal 22).

“The Federal Bank has shown a strong recovery in business trends, despite an increase in COVID-19 cases in its baseline. She had a solid performance, despite many odds. Current account savings trend remains healthy, liability deductible We expect margin to improve at 2TFY22, supported by a pick-up in credit trends and lower cost of funds We maintain our buy rating with a target price of Rs 110 per share (1.2 times the expected book value FY23E).

Federal Bank stock was last seen at Rs 84.

Buy HDFC, Says Motilal Oswal Institutional Equities

Buy HDFC, Says Motilal Oswal Institutional Equities

According to the brokerage, HDFC sold loans worth Rs 71.3 billion in fiscal year 2QFY22 compared to Rs 30.3 billion year-on-year and Rs 55 billion in QoQ. “We expect the company to report an initial disposal income of Rs 3.2 to 3.3 billion following the sale. Note that in the previous fiscal year it sold Rs 190 billion of loans, ”the brokerage said.

“HDFC is our preferred choice in the housing finance industry. We value HDFC’s ability to gain profitable market share despite significant competitive pressures. any reduction in stamp duty.

5.5-6%, the company managed to manage spreads, despite the sharp drop in mortgage yields, led by the largest public sector bank in India. HDFC has a large reserve buffer in place to guard against contingencies in non-performing assets due to disruption caused by COVID. We expect it to deliver a core return on equity of 12-13% over the medium term.

The Motilal Oswal Institutional Equities report does not suggest any target on the stock. HDFC shares were last seen at Rs 2,754 on the NSE.

Disclaimer

Disclaimer

The above actions are taken from the brokerage report of Motilal Oswal Institutional Equities. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technology, the author and the brokerage are not responsible for any losses caused as a result of decisions based on the article. The above report is for informational purposes only.

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