Antique Stock Broking has reaffirmed its constructive view on select financial stocks following their June-quarter earnings, retaining positive ratings on Union Bank of India, HDFC Life Insurance Company and ICICI Prudential Asset Management Company, while maintaining a more cautious stance on HDFC Asset Management Company (HDFC AMC).

The brokerage said the latest quarterly results reinforced the long-term earnings outlook for the banking and insurance companies under its coverage, supported by healthy profitability, stable asset quality and improving business momentum. However, it believes HDFC AMC’s current valuations adequately reflect its growth prospects despite a steady operating performance.

Union Bank: Earnings beat driven by margins and lower costs

Union Bank of India emerged as one of Antique’s preferred picks after reporting a stronger-than-expected Q1FY27 performance.

The brokerage said the bank posted a profit after tax of Rs 5,332 crore, up nearly 30% year-on-year, driven by better-than-expected net interest income growth, expansion in net interest margins and lower operating expenses.

Antique noted that reported net interest margins expanded sequentially as the bank benefited from balance sheet optimisation, a lower share of high-cost bulk deposits and improved funding costs. While loan growth remained below the industry average, management continues to guide for credit growth above the system in FY27.

Following the results, Antique marginally raised its FY27 and FY28 earnings estimates by 3% and 2%, respectively, while maintaining its ‘Buy’ rating. The brokerage revised its target price to Rs 212 from Rs 215 after rolling forward its valuation, indicating an upside of around 26%.

HDFC Life prioritises growth over margins

Antique retained its ‘Buy’ rating on HDFC Life Insurance with an unchanged target price of Rs 740, saying the insurer delivered an in-line June-quarter performance, indicating an upside or around 30%.

The brokerage highlighted 9% year-on-year growth in both annualised premium equivalent (APE) and value of new business (VNB), supported by strong traction in credit life and group insurance, while individual business growth remained moderate due to continued softness in the HDFC Bank distribution channel.

Although VNB margins moderated slightly to around 25%, Antique said the impact of GST changes was largely offset by a better product mix. Management has reiterated its strategy of prioritising premium growth over margin expansion, with margins expected to remain broadly stable.

The brokerage expects HDFC Life to deliver APE, VNB and embedded value CAGR of 14%, 16% and 14%, respectively, over FY26-FY29, and maintained its ‘Buy’ recommendation.

ALSO READ

HDFC AMC delivers steady operating performance

Antique maintained a ‘Buy’ rating on HDFC Asset Management Company with a target price of Rs 3270, indicating an of around 24%.

The brokerage said HDFC AMC reported a stable operating performance, supported by healthy equity inflows, resilient market share and continued profitability. However, it believes the stock’s current valuation already captures much of its medium-term growth potential.

As a result, Antique retained its ‘Hold’ recommendation despite remaining constructive on the company’s underlying business fundamentals.

ICICI Prudential Life starts FY27 on a strong footing

Antique also reiterated its ‘Buy’ rating on ICICI Prudential Life Insurance with a target price of Rs 730, indicating an upside of 45%.

The brokerage said the insurer delivered a strong start to FY27, supported by healthy premium growth and continued expansion in margins. It expects product mix improvements and disciplined execution to support sustainable earnings growth over the medium term.

ALSO READ

Antique believes the company’s focus on profitable growth positions it well to benefit from improving demand across the life insurance industry and therefore retained its positive recommendation.

Conclusion

Antique’s latest review of the financial sector suggests it continues to favour lenders and insurers with strong earnings visibility, healthy profitability and disciplined execution. Among the companies under coverage, the brokerage remains positive on Union Bank of India, HDFC Life Insurance and ICICI Prudential Life Insurance..

Disclaimer: Investment views and target prices attributed to Antique Stock Broking are for informational purposes only and do not constitute direct buy, sell, or hold recommendations by this publication. Under SEBI regulations, readers are strongly advised to consult a certified financial advisor or a SEBI-registered research analyst before making any capital commitments based on third-party brokerage reports. Past performance and corporate earnings figures are historical indicators and do not guarantee future market returns or valuation growth.

This disclaimer has been generated using AI to support user well-being and responsible content consumption.