Axis securities bets on ICICI Bank, SBI, Bajaj Finance after Q4 earnings

India’s banking and financial sector ended the March quarter on a stronger note as improving asset quality, lower stress levels and stable loan growth lifted investor confidence across the market. After the latest earnings season, several brokerages increased focus on select private banks, PSU lenders and non-banking finance companies that showed consistent operational strength despite global uncertainty.

Market analysts said banks entered FY27 with healthier balance sheets and improving recovery trends. At the same time, credit costs softened across several institutions, helping lenders protect profitability even as global volatility and geopolitical concerns continued to pressure financial markets.

Brokerage firm Axis Securities highlighted multiple banking and NBFC names that could deliver steady growth over the medium term. Analysts pointed to stable retail demand, recovering corporate borrowing and stronger collection efficiency as major positives emerging from the quarter.

In Mumbai’s Dalal Street trading circles, dealers and retail investors closely tracked banking counters after earnings announcements. Many investors shifted attention toward lenders with stronger retail franchises and cleaner loan books. At brokerage offices and investor meet-ups, conversations largely revolved around which financial stocks could maintain earnings momentum over the next two years.

Among private lenders, ICICI Bank remained one of the most preferred picks for analysts. Brokerages highlighted the bank’s stable margins, improving loan growth and manageable stress in unsecured lending portfolios. Analysts also expressed confidence in the lender’s ability to maintain healthy profitability as retail and corporate demand improved.

Meanwhile, Kotak Mahindra Bank attracted attention after analysts observed easing pressure in unsecured segments such as credit cards and microfinance. Market experts also noted that the bank’s investment in digitisation and automation could improve operational efficiency over the next few financial years.

Public sector lenders also drew fresh interest from institutional investors. State Bank of India emerged as a preferred PSU banking bet after the lender reported steady traction across retail, agriculture and corporate lending segments. Analysts particularly focused on the bank’s growing exposure to sectors such as renewable energy, transmission infrastructure and semiconductor-linked industries.

At the same time, mid-sized banks continued to attract investor attention due to faster loan growth and improving deposit quality. Federal Bank gained support from analysts because of its improving CASA ratio, disciplined deposit strategy and relatively stable asset quality trends.

Smaller lenders also featured prominently in brokerage discussions. Ujjivan Small Finance Bank remained on investor radar as analysts projected stronger secured loan growth and gradual moderation in credit costs. Experts believe the lender’s push toward secured lending may help reduce volatility in earnings going forward.

Among NBFCs, Bajaj Finance continued to receive strong backing from market participants. Analysts highlighted the company’s consistent customer additions, improving asset quality and technology-driven operational systems. Many investors also viewed its AI-led efficiency initiatives as an important long-term advantage.

Brokerages further expressed optimism toward companies such as Shriram Finance and CreditAccess Grameen due to improving collection trends and stable business growth.

Despite optimism, analysts still advised investors to remain selective because global interest rate uncertainty and geopolitical tensions could influence market sentiment in the coming quarters. However, most experts agreed that India’s banking sector currently appears far more stable than it did during earlier stress cycles.

For retail investors, the latest earnings season reinforced one key message: lenders with stronger asset quality, disciplined growth and efficient operations continue to dominate market confidence in an increasingly competitive financial landscape.