The global brokerage house Jefferies has shared its latest recommendations and top picks among leading financial sector stocks. 5 key names stand out. From large banks to NBFCs and insurers, Jefferies has kept its ‘Buy’ tag across these stocks. As per the brokerage report, these stocks have strong earnings potential, have showcased significant improvement in asset quality and outlined a stable growth outlook.
Let’s take a look at the top financial picks that Jefferies has outline-
Jefferies on HDFC Bank: Top pick among banks
Jefferies has reiterated HDFC Bank as its top pick with a target price of Rs 1,200 per share. This implies 24% upside for the HDFC Bank share price from current levels. According to the brokerage, the bank’s improving loan-to-deposit ratio and strong deposit growth are encouraging signs.
“We have factored 16% CAGR in deposits and 12% in loans over FY25-28E and arrive at an LDR of 87% by Mar-28,” the report noted.
The brokerage also pointed out that while rate cuts may temporarily weigh on margins, stable credit costs and better cross-sell opportunities can support profitability. “Asset quality has held up well and bank isn’t very worried on its exposures in SME/export oriented sectors as it is to better rated customers,” Jefferies said in its report.
Jefferies on ICICI Bank
For ICICI Bank, Jefferies has reiterated its Buy rating with a price target of Rs 1,760. This implies 25% upside for the share price of ICICI Bank share price from current levels. The brokerage noted that the bank is well-placed with the “lowest LDR among private banks that can aid credit growth higher than peers.”
While rate cuts may hurt margins briefly, Jefferies expects efficiency gains to offset the impact. “Over FY25-28, we see loan CAGR of 15% and credit costs of 50-70bps, driving 11% CAGR in earnings and ROE of 17% in FY26,” the brokerage highlighted.
Jefferies on Max Financial Services
Among insurers, Jefferies has given a Buy rating to Max Financial Services with a price target of Rs 1,900. As per this target, the share price of Max Financial Services could climb 19% from current levels.
The brokerage believes Axis Max Life, its subsidiary, stands to benefit from regulatory clarity and brand synergies.
“The Insurance Amendment Bill opens the possibility of merger of holdco/listed entity with LI & trim holdco discount,” Jefferies noted, adding that the same bill may also allow the company to expand into health insurance.
Jefferies on Bajaj Finance
Bajaj Finance remains another top NBFC pick for Jefferies, with a price target of Rs 1,100. This implies that the Bajaj Finance share price may jump 11% over the next 1 year. The brokerage believes earnings growth of over 20% can be sustained, supported by stable asset quality and strong AUM expansion.
“Bajaj Finance asset quality trends are stabilising now, after a short period of surge as the older book clears out & new book has been built with tighter underwriting guardrails,” Jefferies added.
Jefferies on Cholamandalam Finance
For Cholamandalam Investment and Finance, Jefferies has also maintained its Buy call despite near-term concerns.
The brokerage expects the company may deliver strong EPS growth as margins expand following rate cuts. “We believe Cholamandalam Investment and Finance has multiple levers that can help it deliver 25%+ EPS CAGR and 19-20% ROE over FY25-28E, even as we see some headwinds to growth and asset quality near term,” the report stated.