SBI, Kotak Bank, Federal Bank, Shriram Finance among Axis Direct's top 7 BFSI stock picks
In NBFC space, Bajaj Finance (Target: Rs 1,150) and Shriram Finance (Target: Rs 1,200). For Bajaj Finance, the brokerage believes the recent LGD reset as a move to strengthen balance sheet resilience.
- Feb 12, 2026,
- Updated Feb 12, 2026 12:56 PM IST
The Indian banking and financial sector is showing signs of a turnaround, with credit growth displaying decisive reversal signals in the third quarter of FY26, according to Axis Direct. The broking lists top banking heavyweights and mid-cap performers as its top conviction ideas.
State Bank of India (SBI): The country’s largest lender remains a top pick with a ‘Buy’ rating and a target price of Rs 1,280. Axis highlighted that the bank’s management has revised its credit growth guidance upwards to 13-15%" from the earlier 12-14%, supported by broad-based growth trends.
Kotak Mahindra Bank: For Kotak Mahindra Bank, the brokerage has a target price of Rs 515, noting that stress in the unsecured book—specifically Microfinance (MFI) and Personal Loans—has declined QoQ. Axis expects the bank to press the growth pedal on unsecured loans again, aiming for mid-teens growth without compromising on quality.
Federal Bank: Federal Bank is a preferred pick with a target price of Rs 320. The bank delivered a NIMs surprise in Q3, expanding margins by 12 basis points despite the pressure of a rate cut. The brokerage expects the bank’s return ratios to improve over the next two years.
City Union Bank: City Union Bank is another mid-cap favourite, with a target price of Rs 360. The brokerage noted that the bank’s growth engine has started to fire, with credit growth hitting a multi-quarter high of 21% year-on-year.
In NBFC space, Bajaj Finance (Target: Rs 1,150) and Shriram Finance (Target: Rs 1,200). For Bajaj Finance, the brokerage believes the recent LGD reset as a move to strengthen balance sheet resilience.
Ujjivan Small Finance Bank: The brokerage has also tagged Ujjivan Small Finance Bank as a ‘Buy’ with a target price of Rs 74.
Meanwhile, for Shriram Finance, Axis noted that upside risk exists for NIMs, driven by credit rating upgrades and lower cost of funds. The management highlighted that there is no visible stress build-up across segments, it said.
While banks like ICICI Bank and SBI Cards were listed under ‘Misses’ for the quarter, the broader sentiment is turning, Axis said.
The Indian banking and financial sector is showing signs of a turnaround, with credit growth displaying decisive reversal signals in the third quarter of FY26, according to Axis Direct. The broking lists top banking heavyweights and mid-cap performers as its top conviction ideas.
State Bank of India (SBI): The country’s largest lender remains a top pick with a ‘Buy’ rating and a target price of Rs 1,280. Axis highlighted that the bank’s management has revised its credit growth guidance upwards to 13-15%" from the earlier 12-14%, supported by broad-based growth trends.
Kotak Mahindra Bank: For Kotak Mahindra Bank, the brokerage has a target price of Rs 515, noting that stress in the unsecured book—specifically Microfinance (MFI) and Personal Loans—has declined QoQ. Axis expects the bank to press the growth pedal on unsecured loans again, aiming for mid-teens growth without compromising on quality.
Federal Bank: Federal Bank is a preferred pick with a target price of Rs 320. The bank delivered a NIMs surprise in Q3, expanding margins by 12 basis points despite the pressure of a rate cut. The brokerage expects the bank’s return ratios to improve over the next two years.
City Union Bank: City Union Bank is another mid-cap favourite, with a target price of Rs 360. The brokerage noted that the bank’s growth engine has started to fire, with credit growth hitting a multi-quarter high of 21% year-on-year.
In NBFC space, Bajaj Finance (Target: Rs 1,150) and Shriram Finance (Target: Rs 1,200). For Bajaj Finance, the brokerage believes the recent LGD reset as a move to strengthen balance sheet resilience.
Ujjivan Small Finance Bank: The brokerage has also tagged Ujjivan Small Finance Bank as a ‘Buy’ with a target price of Rs 74.
Meanwhile, for Shriram Finance, Axis noted that upside risk exists for NIMs, driven by credit rating upgrades and lower cost of funds. The management highlighted that there is no visible stress build-up across segments, it said.
While banks like ICICI Bank and SBI Cards were listed under ‘Misses’ for the quarter, the broader sentiment is turning, Axis said.