Axis Securities has turned positive on select banking and financial stocks after the March quarter earnings season, identifying ICICI Bank, State Bank of India, Bajaj Finance, Shriram Finance and CreditAccess Grameen as top conviction ideas. According to reports from The Financial Express, the brokerage expects improving asset quality, lower credit costs and healthy loan demand to support earnings growth over the next two financial years. The brokerage maintains that credit growth across banks under its coverage universe remained healthy during Q4FY26, while non-banking finance companies reported improving collection efficiency and lower slippages.
Axis Securities maintained a 'Buy' rating on ICICI Bank with a target price of ₹1,700, implying 36% upside from current levels. As reported by The Financial Express, the brokerage said ICICI Bank delivered a meaningful recovery in loan growth during Q4FY26 after remaining in the 11-13% range over the previous several quarters. The lender is expected to post nearly 16% compound annual credit growth between FY26 and FY28, with management confident that benign credit cost trends will continue, with credit costs being contained at sub-50 bps going ahead. The bank's unsecured portfolio trends improved materially with lower slippages and stronger recoveries in the corporate book.
Axis Securities retained a 'Buy' recommendation on State Bank of India with a target price of ₹1,285, indicating 32% upside from current levels. According to reports from The Financial Express, SBI reported nearly 17% credit growth during Q4FY26, ahead of overall system growth, with momentum visible across retail, agriculture and corporate lending segments. The bank continues to witness strong traction in emerging sectors including renewables, transmission, data centers, battery energy storage systems, pump-storage projects and semiconductor ecosystems. Axis Securities expects SBI to deliver nearly 14% compound annual growth between FY26 and FY28 and maintain a return on assets near 1%.
Axis Securities maintained a 'Buy' rating on Bajaj Finance with a target price of ₹1,160, indicating 26% upside from current market price. As reported by The Financial Express, the company's asset quality cycle is entering a more favourable phase as stress in MSME lending and captive financing portfolios moderates gradually. Management has guided for RoA to range between 4.4-4.6% in FY27, supported by improving operating leverage and lower credit costs. The brokerage expects Bajaj Finance to maintain healthy AUM growth of 22-24% during FY27 with support from newer businesses launched over the past few years.
Axis Securities maintained a 'Buy' recommendation on Kotak Mahindra Bank with a target price of ₹500, implying 28% upside from current market price. According to reports from The Financial Express, stress in the unsecured loan book has largely peaked after a sharp decline in slippages and credit costs during the March quarter. Federal Bank also remained among the brokerage's preferred mid-sized banking names with a target price of ₹340, supported by improving margins, disciplined cost management and healthy asset quality trends. Ujjivan Small Finance Bank received a 'Buy' rating with a target price of ₹78, with Axis Securities expecting the lender's secured portfolio expansion and improving microfinance trends to support nearly 25% compound annual credit growth between FY26 and FY28.
