Jefferies is betting on the growth opportunities across the Indian banking sector with ‘Buy’ calls on ICICI Bank, HDFC Bank, IndusInd Bank, and Punjab National Bank, seeing as much as 17% upside in select counters from current levels. The brokerage said earnings across these lenders remain firm, margins steady, and credit costs in check, a combination that, in its view, still isn’t fully priced in.
Jefferies noted that balance sheets are stronger, deposit growth is improving, and return ratios are holding near cycle highs. Indian banks, it said, continue to trade below global peers despite better profitability and capital strength, a gap the brokerage believes will close as the cycle runs its course.
Jefferies on ICICI Bank: ‘Buy’
Jefferies reiterated its Buy rating on ICICI Bank and raised the price target to Rs 1,710 from Rs 1,460, implying about 17% upside from current levels.
“ICICI Bank remains our preferred large-cap pick,” the brokerage said, citing a strong liability franchise, steady margin profile, and healthy provisioning buffers.
The brokerage expects loan growth at 16% CAGR over FY25–28, supported by traction in retail and SME segments, with ROE projected to rise to 17% by FY27.
Jefferies on HDFC Bank: ‘Buy’
In its sector note on leadership transition, Jefferies maintained a Buy on HDFC Bank, citing “smoother succession and steady growth trajectory.”
The brokerage said management continuity, high CASA ratio, and rising fee income should sustain double-digit loan growth even amid a slower industry environment.
While no price target was explicitly mentioned, Jefferies said HDFC Bank remains “among the most reliable compounding franchises” with stable return metrics and improving credit costs.
Jefferies on IndusInd Bank: ‘Buy’
Jefferies reaffirmed its Buy call on IndusInd Bank, noting improving deposit momentum and stable asset quality.
The brokerage said IndusInd’s corporate book de-risking and granular deposit growth position it well for the next credit cycle. “Valuations remain attractive amid improving liability franchise,” Jefferies observed.
The report added that the stock trades below its historical average multiple despite consistent 15–16% ROE, offering re-rating potential.
Jefferies on Punjab National Bank: ‘Buy’
Jefferies reiterated a Buy on Punjab National Bank with a target price of Rs 135, representing a 12% upside from current levels.
“Earnings improvement and book value growth could sustain re-rating,” the brokerage said. PNB’s gross NPA ratio has improved meaningfully, while credit growth is expected to accelerate as public-sector banks benefit from deposit inflows and lower slippages.
Jefferies added that Indian banks’ valuation premium versus global peers has narrowed sharply, making domestic names more attractive at current levels.
According to Jefferies, the banking sector’s re-rating cycle is still unfolding, supported by stable ROEs, improving deposit franchises, and declining credit costs. Among large-caps, ICICI Bank and HDFC Bank remain core holdings, while IndusInd and PNB offer relative value upside.