Banks In Focus After Q4 Axis Securities Bets On ICICI Bank Bajaj Finance And SBI

With Q4 numbers largely in, Axis Securities has updated its view on the BFSI pack. The brokerage believes that strong loan growth, healthier balance sheets and operating leverage can support robust earnings through FY28 despite near term margin pressures. Its latest strategy note highlights a focused list of banks and NBFCs where valuations and growth visibility still look attractive post results.

Asset Quality Tailwinds And Strong Credit Growth

Axis Securities points out that Q4FY26 saw healthy credit growth, with private banks growing their loan books around 13 to 16 percent and public sector banks clocking over 14 percent year on year.

System wide loan growth stood near 13.8 percent by mid March 2026, while asset quality and credit costs continued to improve, giving the brokerage confidence that sector earnings can compound steadily over FY26 to FY28.

Icici Bank And Sbi Lead The List

Among private banks, ICICI Bank is Axis Securities top pick with a Buy rating and a target price of ₹1,700 implying about 36 percent upside from around ₹1,246.

The brokerage expects ICICI Bank to deliver roughly 16 percent annual credit growth till FY28 and notes that the stock trades at a trailing price earnings multiple of about 16.5 times versus an industry average near 12 times.

State Bank of India also carries a Buy tag with a target of ₹1,285 indicating around 32 percent potential upside from roughly ₹979, supported by Q4FY26 credit growth of about 17 percent and a trailing P E near 10.8 times.

Bajaj Finance Shriram Finance And Creditaccess Grameen

In the NBFC basket, Bajaj Finance is the top recommendation with a Buy rating and a target price of ₹1,160 which suggests upside of about 26 percent from around ₹912.

Axis Securities expects Bajaj Finance to grow its assets under management by 22 to 24 percent in FY27, arguing that the current rich valuation near 29.8 times P E is justified by the strong AUM growth outlook.

The note also favours Shriram Finance and CreditAccess Grameen as high growth NBFC ideas, assigning them target prices of ₹1,200 and ₹1,850 respectively while projecting sector wide AUM growth of 17 to 19 percent in FY26 and around 21 percent annually for NBFCs between FY26 and FY28.

Funding Costs Competition And Macros

Axis Securities cautions that NBFCs could face funding challenges if interest rates stay elevated or liquidity tightens, which may pressure margins even with solid AUM growth.

Across banks and NBFCs, the brokerage flags that its growth assumptions depend on stable margins, disciplined risk management and sustained demand; any sharp macro slowdown or asset quality shock could derail its FY26 to FY28 earnings projections.

Investor Strategy Insights

• Q4FY26 credit growth near 13.8 percent system wide with private banks at 13 to 16 percent and PSU banks above 14 percent
• Axis Securities’ preferred private bank is ICICI Bank with Buy and a ₹1,700 target implying about 36 percent upside
• SBI rated Buy with a ₹1,285 target and nearly 32 percent upside potential based on strong 17 percent credit growth
• Bajaj Finance plus Shriram Finance and CreditAccess Grameen top the NBFC list with 22 to 24 percent AUM growth expectations and up to 26 percent stock upside for Bajaj Finance

Sources:  Whalesbook