Macquarie revises outlook on financial stocks: LIC, ICICI Lombard upgraded; SBI Life, PB Fintech downgraded

Macquarie has updated its outlook on the financial sector, delivering both upgrades and downgrades on key stocks while maintaining a selective stance on the sector. Here’s a breakdown of their latest analysis:

Key Insights:

Advertisement

  1. Loan Growth and Margins:
    • FY26 is expected to deliver better loan growth with stable performance.
    • Margins may slightly moderate, while credit costs are forecasted to remain stable.
    • Large private banks are projected to post 16-17% EPS growth and ROEs in FY26.
  2. Selective Risk-Reward:
    • NBFCs offer selective risk-reward opportunities.
    • Insurance stocks face regulatory overhangs.

Upgrades:

  • LIC: Upgraded from Neutral to Overweight, with the target price raised to ₹1,215 (from ₹1,200).
  • ICICI Lombard: Upgraded from Neutral to Overweight, with the target price revised to ₹2,255 (from ₹2,000).

Downgrades:

  • SBI Life: Downgraded from Overweight to Neutral, with the target price reduced to ₹1,435 (from ₹1,830).
  • PB Fintech: Downgraded from Neutral to Underweight, with the target price revised to ₹1,530 (from ₹1,220).

Top Picks:

Macquarie’s top recommendations in the financial sector include:

  • HDFC Bank
  • ICICI Bank
  • Aditya Birla Capital
  • PFC
  • Shriram Housing Finance

Macquarie’s latest insights highlight a mixed sentiment across the financial sector, emphasizing cautious optimism with selective stock opportunities. Investors are advised to focus on top picks for stable returns, while keeping an eye on regulatory risks in the insurance segment.

Disclaimer: This article is based on brokerage opinions and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.