Macquarie remains constructive on India’s financials sector despite near-term margin pressures and has highlighted a set of top picks, including Life Insurance Corporation (LIC), HDFC Bank, and Axis Bank, in its latest note.
The brokerage expects banks to deliver a strong 15% EPS CAGR over the next three years, with margin issues seen as transient. It prefers large private sector banks and sees selective risk-reward opportunities in non-banking financial companies (NBFCs).
Macquarie upgraded PB Fintech to neutral from underperform, raising the target price to ₹1,945, citing improving prospects. Conversely, it downgraded IndusInd Bank to underperform from outperform with a reduced target of ₹650, and Kotak Mahindra Bank to neutral, though the target price was raised to ₹2,300.
It also downgraded SBI Cards to neutral with a revised target of ₹1,040, and HDFC Life Insurance to underperform from neutral, raising the target price slightly to ₹720.
Apart from LIC, HDFC Bank, and Axis Bank, Macquarie’s top picks in the sector include Aditya Birla Capital (ABCAP), Power Finance Corporation (PFC), and Shriram Housing Finance (SHFL), reflecting its preference for scale, balance sheet strength, and growth visibility.
