Global brokerage house Jefferies has identified key private Indian banks in its recent sector report. The brokerage house points to a combination of steady credit demand and helpful entry valuations. While the wider industry moves at various speeds, with some lenders slowing down to fix their balance sheets while others reach multi-quarter highs, the firm maintains its view that the sector can provide strong returns.
Jefferies on Axis Bank: ‘Buy’
Axis Bank Ltd. remains a top choice for Jefferies with a ‘Buy’ rating and a target of Rs 1,530, implying a 21% upside. The bank delivered a robust performance in the December quarter. Credit expansion reached 14%, marking its strongest momentum in six quarters. This pace, coupled with a 15% increase in deposits, easily beat the brokerage’s own FY26 projections of 11%. Jefferies uses a sum-of-the-parts method to price the core bank at 1.7x Dec 27 adjusted price-to-book. They also account for the significant worth of Axis’s arms in insurance, finance, and asset management, which provide additional buffer to the valuation.
Jefferies on IndusInd Bank: ‘Buy’
Jefferies maintains a ‘Buy’ rating on IndusInd Bank Ltd. with a target of Rs 1,050, suggesting a potential 16% rise. During the December quarter, the bank saw a 13% year-on-year drop in loans and a 4% fall in deposits. Jefferies notes this was a planned decision to consolidate its microfinance and corporate lending books. The brokerage now sees early signs of a comeback in the auto and SME categories. While they anticipate that FY26 will be a bridge year, Jefferies expects a major improvement by FY27 as the incoming CEO starts their tenure. They see the current market price as a strong chance for a turnaround, valuing the bank at 1.2x its Dec 27 adjusted book value per share.
Jefferies on Kotak Mahindra Bank: ‘Buy’
Jefferies has reaffirmed its ‘Buy’ rating on Kotak Mahindra Bank Ltd. with a target of Rs 2,650, predicting a 21% increase. The bank reported a 16% year-on-year rise in loans for the December quarter, while deposits grew by 15%. A vital metric for Jefferies is the 12% growth in low-cost CASA deposits, which shows better pull than in prior quarters. The brokerage values the core banking business at 2.2x its Dec 27 adjusted price-to-book. They point to the bank’s lead in wealth management and investment banking as a major support for its market standing.
The domestic banking market is currently split between consistent players like Axis and Kotak and turnaround opportunities like IndusInd. With industry-wide credit expansion staying between 10% and 12%, Jefferies believes these specific banks are positioned to benefit from upcoming leadership changes and better market settings.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.