Motilal Oswal sees up to 36 percent upside in Indian private banks ahead of Q1 results
Brokerage Motilal Oswal has identified nine Indian private lenders poised for significant gains ahead of first-quarter earnings, citing robust credit growth and favorable funding dynamics.
Motilal Oswal has highlighted nine Indian private banking stocks with substantial upside potential ahead of the upcoming first-quarter earnings season. The brokerage forecasts that overall bank credit growth will sustain a mid-to-high teens trajectory in the near term.
Large private sector lenders are particularly well positioned to capitalize on the current macroeconomic environment. Analysts note these institutions can mobilize a larger share of FCNR(B) deposits via their overseas franchises. This structural advantage allows them to raise low-cost foreign borrowings, insulating their net interest margins from domestic funding pressures.
HDFC Bank leads the brokerage’s bullish outlook with a target price of 1,110 rupees, implying a 36 percent upside from current market levels. ICICI Bank and Kotak Mahindra Bank follow closely, both carrying a target price that suggests a 24 percent gain, set at 1,750 rupees and 470 rupees respectively.
Among other private lenders, DCB Bank is projected to see a 25 percent rally to a target of 235 rupees. AU Small Finance Bank is also favored, with analysts forecasting a 23 percent increase to a target price of 1,275 rupees.
Federal Bank and Equitas Small Finance Bank round out the moderate growth expectations with upside potentials of 14 percent and 13 percent. The brokerage has assigned these lenders target prices of 375 rupees and 90 rupees per share.
Conversely, the brokerage sees more modest near-term gains for Bandhan Bank and RBL Bank. Motilal Oswal assigned these lenders target prices of 225 rupees and 400 rupees, reflecting limited upside of 8 percent and 6 percent from current valuations.
This selective optimism underscores a market preference for banks with strong liability franchises as India’s credit cycle remains active. Investors will be closely watching the upcoming first-quarter results to validate these credit growth and funding cost assumptions. The divergence in target upside highlights the premium placed on deposit mobilization capabilities.
