Nuvama initiates ‘Buy’ on 7 financial stocks with upto 29% upside potential

The list includes private banks, a public sector bank, a small finance bank, a diversified financial services company and a microfinance-focused non-banking financial company. Here is a company-wise look at the stocks, their target prices and the rationale behind Nuvama’s recommendations.

Nuvama on RBL Bank: ‘Buy’

Nuvama assigned a ‘Buy’ rating to RBL Bank Ltd. with a target price of Rs 470, implying an upside of about 26.7%. The brokerage said the bank has emerged from a prolonged period marked by corporate loan stress, the Covid-19 disruption, management changes and asset quality issues in its microfinance and credit card portfolios. It believes the Rs 26,000 crore capital infusion by Emirates NBD has strengthened the bank’s capital position and funding profile. Nuvama expects return on assets to improve to 1.2% to 1.5% during financial years 2028 and 2029 as growth improves and credit costs moderate.

“However, we believe the ENBD-led capital infusion and change in ownership marks a structural turning point for the franchise, providing the bank with abundant capital, stronger parentage and access to lower-cost funding,” Nuvama said.

Nuvama on Karur Vysya Bank: ‘Buy’

Nuvama rated  Karur Vysya Bank with a target price of Rs 360 against the current market price of Rs 290, indicating an upside of about 24.1%. The brokerage said the lender has developed into a consistently well-run private bank with return on assets above 1.5% over several years. It expects the bank to sustain return on assets of 1.6% to 1.8% during financial years 2027 to 2029, supported by healthy capital levels and improving asset quality.

“This coupled with its credible and stable management and strong capital buffer call for premium valuations,” Nuvama said.

Nuvama on City Union Bank: ‘Buy’

Nuvama initiated coverage on City Union Bank with a ‘Buy’ rating and a target price of Rs 250, implying an upside of about 25.6%. The brokerage said the bank has regained its historical profitability after the pandemic and delivered 27% year-on-year credit growth during financial year 2026 through secured retail, small business and agriculture lending. It expects the bank to sustain return on assets of around 1.5% with support from a strong capital position and a secured lending mix.

“We believe the recent correction offers a good entry point to an otherwise best-in-class small private bank,” Nuvama said.

Nuvama on Ujjivan Small Finance Bank: ‘Buy’

Nuvama assigned a ‘Buy’ rating to Ujjivan Small Finance Bank with a target price of Rs 72 against the current market price, implying an upside of about 28.6%. The brokerage said the bank has built a scalable franchise despite two major microfinance asset quality cycles and has diversified its loan book through secured products. It expects return on assets to improve to 1.6% to 1.9% during financial years 2027 to 2029 as microfinance stress eases.

“While the licence remains a long-term catalyst, the bank continues to be one of the best plays of the microfinance recovery cycle,” Nuvama said.

Nuvama on Indian Bank: ‘Buy’

Nuvama initiated coverage on Indian Bank with a ‘Buy’ rating and a target price of Rs 1,025, indicating an upside of about 23.1%. The brokerage said the bank has consistently prioritised profitability while maintaining one of the strongest asset quality profiles among public sector banks. It expects return on assets of 1.1% to 1.2% and return on equity of 15% to 16% during financial years 2027 to 2029, supported by healthy capital and provision buffers.

“This, coupled with its best-in-class asset quality performance, strong capital buffer and credible management, calls for sustained premium valuation,” Nuvama said.

Nuvama on Aditya Birla Capital: ‘Buy’

Nuvama assigned a ‘Buy’ rating to Aditya Birla Capital with a target price of Rs 460, implying an upside of about 17.6%. The brokerage said the company has improved scale and profitability across its businesses. It expects the lending business to improve return on assets to 2% to 2.1% during financial years 2027 to 2029 while other businesses continue to deliver healthy growth, supporting its valuation.

“Despite this, the stock continues to trade at a discount to the sum of its parts, providing shareholders exposure to multiple high-quality financial services businesses at attractive valuations,” Nuvama said.

Nuvama on CreditAccess Grameen: ‘Buy’

Nuvama initiated coverage on CreditAccess Grameen with a ‘Buy’ rating and a target price of Rs 1,750, implying an upside of about 19.8%. The brokerage said the company remains the country’s largest microfinance-focused non-banking financial company with a strong asset quality record. It expects expansion into non-microfinance lending to support growth while improving earnings resilience over the medium term.

“We believe this transition should not only address concerns around long-term scalability, but also improve earnings resilience,” Nuvama said.

Conclusion

Nuvama based its ‘Buy’ recommendations on improving profitability, healthy capital positions and better asset quality across the seven companies. The brokerage sees upside potential ranging from 17.6% for Aditya Birla Capital to 28.6% for Ujjivan Small Finance Bank based on its June 25, 2026 initiation reports.

Disclaimer: The stock ratings, target prices, and investment rationales mentioned in this report are those of the third-party brokerage firm and do not reflect the views of this publication. This content is intended purely for informational and educational purposes and does not constitute financial advice, an offer, or a solicitation to buy or sell securities. Because investing in equities carries inherent market risks, readers should not make financial decisions based solely on this information and are strongly advised to consult a SEBI-registered investment advisor before making any investment choices. This disclaimer has been generated using AI to support user well-being and responsible content consumption.