Today, we are going to talk about a sector which is the backbone of an economy’s growth. It is a sector without which an economy cannot flourish! By now, you must have guessed that it’s the banking sector which is being talked about.
Banks are the institutions through which savers and borrowers meet. By lending capital to needy borrowers, banks help in creating a multiplier effect on people’s income. This fact is enough to emphasize this sector’s importance. And if you want to be a part of India’s growth story, you must consider banking stocks in your portfolio. So let’s discuss the 10 best banking stocks in India to invest in!
Latest Banking Stock Updates: HDFC Bank Q2 FY23 Results: Quarterly Earnings Announced on October 14- Overall Good profits positive result. Federal Bank Q2 results are out! Profits rises by 53% YOY
| Sl No | Stock Name | Market Capital |
|---|---|---|
| 1 | HDFC Bank Limited | ₹7163731 Cr |
| 2 | ICICI Bank Limited | ₹4785839 Cr |
| 3 | Kotak Mahindra Bank Limited | ₹3324028 Cr |
| 4 | Axis Bank Limited | ₹1952161 Cr |
| 5 | IDFC First Bank Limited | ₹359130 Cr |
| 6 | IndusInd Bank Limited | ₹625386 Cr |
| 7 | Bandhan Bank Limited | ₹500068 Cr |
| 8 | State Bank of India Limited | ₹3935753 Cr |
| 9 | AU Small Finance Bank | ₹392952 Cr |
| 10 | Federal Bank | ₹18.42 Cr |
| 11 | Equitas Small Finance Bank | ₹4.88 Cr |
Best Banking Stocks in India
Following are the 10 best banking stocks to consider in India:
1. HDFC Bank Limited
HDFC Bank Limited, founded in 1994, is the most valuable Indian bank by market capitalization, and the third most valued Indian entity only after Reliance Industries Limited and Tata Consultancy Services Limited. The company offers a range of commercial and transactional banking services to its wholesale and retail customers. As of March 2021, the bank had a deposit base of over ₹13.3 lakh crore, of which ₹6.15 lakh crore have been lying in current and savings account. The company’s share price has grown 22% annually during the past 20 years.
| Market Cap | ₹751503 Cr |
| P/E | 20.33 |
| P/B | 3.13 |
| Profit Growth | 18.51% |
Check HDFC Bank share price targets
2. ICICI Bank Limited
ICICI Bank Limited is the second most valued bank, only after HDFC Bank. Its Capital Adequacy Ratio stands at 19.51%. The company earns a net interest margin of 3.67% and a CASA ratio of 41.8%. The retail customers account for 66% of the total loan book, followed by corporates at 2% and SMEs at 4%. The company has operations in the USA, Singapore, Bahrain, Hong Kong, Dubai, China, UK, Canada, etc. The company holds stake in five subsidiaries. But ICICI Bank fares better on digital banking initiatives as compared to HDFC Bank Limited.
| Market Cap | ₹489657 Cr |
| P/E | 20.98 |
| P/B | 2.93 |
| Profit Growth | 104.17% |
Check ICICI Share price target
3. Kotak Mahindra Bank Limited
Kotak Mahindra Bank is a part of the diversified financial services group led by a prominent banker Mr. Uday Kotak. The bank has a capital adequacy ratio of 23.4%, and earns a net interest margin of 4.45%. The bank operates 1600 branches and 2600 ATMs across India. It has an active customer base of 2.3 crore users. In FY20, the company opened 70% of the new accounts through digital channels.
| Market Cap | ₹331120 Cr |
| P/E | 38.63 |
| P/B | 4.6 |
| Profit Growth | 17.11% |
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4. Axis Bank Limited
Axis Bank Limited is the third largest private sector bank in India. The bank offers financial services to customer segments across large and mid-corporates, MSMEs, agriculture and retail business. The bank has a capital adequacy ratio of 19.31% and earns a net interest margin of 3.59%. The bank’s branch network has increased from 2900 in FY16 to 4600 in FY21. The share of retail segment has increased from 41% in FY16 to 55% in FY21.
| Market Cap | ₹197784 Cr |
| P/E | 15.18 |
| P/B | 1.72 |
| Profit Growth | 304.86% |
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Check Axis Bank Share Price Target
5. IDFC First Bank Limited
IDFC First Bank Limited was incorporated on December 18, 2018 with the amalgamation of IDFC Bank and Capital First under the leadership of Mr. V. Vaidyanathan. The bank has a capital adequacy ratio of 14.33% and earns a net interest margin of 4.65%. The company’s focus is increasing on growing its retail loan book and expands its net interest margins and increase the CASA ratio.
| Market Cap | ₹20056 Cr |
| P/E | 137.88 |
| P/B | 0.96 |
| Sales Growth | 115.79% |
Check IDFC First Bank Share Price Target
6. IndusInd Bank Limited
IndusInd Bank Limited was founded in 1994. As of Q3FY21, the bank’s capital adequacy ratio stood at 16.34% and had a net interest margin of 4.12%. The bank is a part of Hinduja Group of companies. The bank’s branch network has doubled in the last five years from 1000 to 1915, and it has a customer base of 2.5 crore users. 57% of the bank’s loan book is in the consumer finance division and the rest 43% is in the corporate and commercial banking division.
| Market Cap | ₹62566 Cr |
| P/E | 13.57 |
| P/B | 1.32 |
| Sales Growth | -35.80% |
7. Bandhan Bank Limited
Bandhan Bank Limited received the banking license from the Reserve Bank of India on June 17, 2015. Hence, it is a relatively new entity as compared to the larger banks. The bank was founded by Mr. Chandra Shekhar Ghosh with a mission to introduce banking for the rural poor. He started the bank’s business copying the success of microfinance model in Bangladesh. The bank’s net interest margins stand at 8.30%.
| Market Cap | ₹42661 Cr |
| P/E | 339.16 |
| P/B | 2.45 |
| Sales Growth | -27.06% |
8. State Bank of India Limited
The State Bank of India is the largest public sector bank in India as it is the banker to every Indian! The bank has over 200 years of operating history. With a social objective of providing loans at affordable rates and high non-performing assets, the bank’s profitability has taken a hit. But during the last one year, the story has started to improve.
| Market Cap | ₹416645 Cr |
| P/E | 13.15 |
| P/B | 1.62 |
| Profit Growth | 40.88% |
9. AU Small Finance Bank
With Kiara Advani and Aamir Khan as its latest brand ambassadors, the bank is trying to mark their presence in the industry. The bank has a significant presence in the small finance space and disburses small ticket loans to borrowers. The bank earned a return of equity of 22.3% in FY21.
| Market Cap | ₹36481 Cr |
| P/E | 32.29 |
| P/B | 4.66 |
| Profit Growth | 73.49% |
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10. Federal Bank
Federal Bank was incorporated in 1931. The bank has a capital adequacy ratio of 14.31%, and earns a net interest margin of 3.22%. The bank has a CASA ratio of 34.48%. Presently, it has a network of 1272 branches and 1948 ATMs. 47% of the branches are located in Kerala. 54% of the bank’s loan book is made up of retail loans and the rest consists of wholesale loans.
| Market Cap | ₹19699 Cr |
| P/E | 10.42 |
| P/B | 1.05 |
| Profit Growth | 3.08% |
11. Equitas Small Finance Bank
Equitas Small Finance Bank started operations in the year 2007, and has presence in 17 states and Union Territories with 861 bank branches and 330 ATMs. The bank provides loans under 6 categories. It has a capital adequacy ratio of 21.58%, and it earns a net interest margin of 8.47%.
| Market Cap | ₹4931 Cr |
| P/E | 17.57 |
| P/B | 1.16 |
| Profit Growth | 57.70% |
Conclusion
So these were some of the best banking stocks that investors can consider in their portfolio. However, investors should note that this is not a recommendation to buy these stocks at current market levels and they should do their own due diligence before taking an investment decision.
Also Check Related Sectors
| Best Agriculture Stocks in India | Best FMCG Stocks in India |
| Best Infrastructure Stocks in India | Best IT Stocks in India |
| Best EV Stocks in India | Best 5G Stocks in India |
Future of Banking Stocks in India
It is difficult to predict the future of banking stocks with certainty. The performance of these stocks will depend on a variety of factors, including the overall performance of the banking industry, economic conditions, and regulatory changes.
In the short term, the performance of banking stocks may be influenced by events such as interest rate changes, changes in consumer demand for financial services, and the impact of COVID-19 on the global economy. In the long term, the future of banking stocks may be influenced by broader trends in the financial industry, such as the adoption of new technologies and changing consumer preferences.
Overall, it is important for investors to carefully evaluate the risks and potential rewards of investing in banking stocks and to diversify their portfolio to manage their exposure to these risks. It is also a good idea to consult with a financial professional before making any investment decisions.
Are these above stocks in BANKNIFTY?
Yes, these above stocks are in the top 50 list of BANKNIFTY
Are banking stocks good for Intraday?
Intraday stocks are not dependent on the sectors which you choose, it all depends on fundamentals, technical charts and news.
Any Bank stock which gave more than 100% return in 1 year?
Yes, SBI Bank stock gave more than 139% return in just 1 year.
Yes bank suddenly boomed to 50% high it was really amazing rally
Don’t misunderstand the power of IDFC first bank limited as well even this also going to be next multibagger stock, sales this IDFC first bank stock has the very good strong fundamental and financials last quarter result was very positive and it had and great amount of profit in past years.
HDFC bank being a giant, is most stable stock to invest in. Ultimately HDFC bank stocks are most stable stock in future I am relying on this talk for a long term basically this HDFC stock gives dividend for many investors. If you want to do some stable income via stock market always stick on large can stocks like HDFC Bank where you will get a stable passive income from the stocks.
In next 5 years all the banking stocks will boom like anything, because most of them are getting financially educated currently, many investors got emergee during pandemic, this will result in improve in our GDP growth
Federal bank is international bank, I’m reply ng in the same bank, it’s going to fill up my portfolio, which is brilliant. Thank you
I think you have missed out small finance banks, those stocks will be a multibagger than banking stocks.
Personally I like ICICI Bank stock since it has given good amount of return in past few months I took a entry when it was at very low price. Within just 2 months this stop shooted up to 20% of returns I am glad that I had invested in this stock getting a huge amount of returns.
Other day IDFC First bank gave mega returns, I never expected 12% returns in just one day, the banking stocks are multibagger, most of people are investing in these new bank, where the interest rate will be higher
You might have seen recent news of steps to limited and HDFC Bank merging news. After this news the HDFC Bank is able to shoot up to 20% of return in just one day is usually the large stocks doesn’t follow the circuit within a day, but in this situation HDFC Bank shooted up to 20% of return just single day. Due to high volume investing in this particular stock from the retail investors.
In this 2022 recession most of the banks increased the rate of interest of FD, I think this will definitely help indirectly to increase in the stock price of these bank stocks since there will be lot of incash flows.
According to akash shrivastava, the equitas small finance bank stock is a multibagger.
My personal favorite is HDFC bank, because it has given consistent returns over the years.