ICICI Bank, SBI, HDFC Bank, DCB, SIB shares: Target prices as credit growth improves
Among large banks, the domestic brokerage also likes HDFC Bank Ltd for its attractive valuation of 1.3 times forward standalone book.
- Sep 7, 2026,
- Updated Sep 7, 2026 8:04 AM IST
Nirmal Bang Institutional Equities in its latest banking sector note said it prefers ICICI Bank Ltd for its best-in-class returns and operating performance. It also likes State Bank of India (SBI) as a preferred PSU play, thanks to a sustainable 1.1–1.2 per cent return on assets. Among large banks, the domestic brokerage also likes HDFC Bank Ltd for its attractive valuation of 1.3 times forward standalone book. Nirmal Bang said South Indian Bank, given a rerating opportunity is emerging; and DCB Bank, due to its strong execution, are its mid-sized bank picks.
Nirmal Bang said the performance across its covered banks was broadly healthy in the June quarter (Q1FY27), with loan growth accelerating to 17.2 per cent YoY from 15.1 per cent in Q3FY26.
Sequential expansion, it said, was supported by a recovery in corporate credit among private-sector banks, RAM-led growth at PSU banks, and continued strength in gold loans. Deposit growth, however, remained slower at 12 per cent YoY.
For banks, asset quality remained benign, with average credit cost moderating to 45 basis points from 48 basis points in 4QFY26 and 71 basis points in Q1FY26.
"Operating costs remained disciplined, while fee income was resilient with the usual first-quarter seasonality. Overall, aggregate NII, PPOP, and PAT grew 11 per cent, 7 per cent, and 14 per cent YoY, respectively," Nirmal Bang said in a September 6 note.
The brokerage said system deposit growth accelerated to 14.7 per cent by mid-August, aided by the RBI’s concessional FCNR(B) swap facility, reducing funding gap versus credit growth. FCNR(B) mobilisation increased from $65.4 billion as of August 21 to $127.2 billion by August 31, equivalent to approximately 4.5 per cent of outstanding system deposits. Including ECB and overseas foreign-currency borrowing inflows, total mobilisation under the facility reached $136.4 billion.
"We, consequently, expect system deposit growth to remain robust in the near term. While the trajectory following the closure of the window remains a monitorable, the sizeable mobilisation already achieved should provide a meaningful stock benefit, given the three-to-five-year tenor of eligible deposits. It should improve funding availability, reduce reliance on high-cost domestic bulk deposits, and moderate competitive deposit intensity," Nirmal Bang said.
ICICI Bank target price Nirmal Bang said it expects ICICI Bank to sustain its strong earnings trajectory, supported by healthy credit growth, benign asset quality, resilient NIMs, and sustained fee income momentum. This is expected to drive RoA of 2.3–2.4 per cent.
It suggested 'Buy' rating with a target price of Rs 1,820, based on Rs 1,570 for the standalone bank and Rs 250 per share for subsidiaries.
HDFC Bank target price
For HDFC Bank, Nirmal Bang said healthy credit demand should sustain loan growth momentum, while productivity gains are expected to drive operating leverage. Asset quality remained comfortable, with existing provisions considered adequate for the upcoming ECL transition and no material increase in credit costs expected.
"Margins are likely to recover gradually, supported by lower funding costs through reduced borrowings, improving CASA mix, and a higher retail loan mix. Overall, sustained loan growth, margin recovery, cost discipline, and stable asset quality should support ROA of 1.8– 1.9 per cent. We have a BUY rating with a target price of Rs 1,020," Nirmal Bang said.
SBI target price Nirmal Bang said SBI is well-positioned to deliver ROA of 1.1–1.2 per cent. It expects SBI to sustain healthy earnings, supported by robust credit growth, broadly in line with system growth, resilient margins, strong fee income, disciplined cost control, and benign asset quality.
"We have a BUY rating with a target price of Rs 1,275, based on 1.35x Jun-28E standalone ABV plus Rs 250/share for subsidiaries," it said.
DCB Bank share price target
Nirmal Bang said healthy loan growth, gradual NIM expansion, stronger fee income, continued cost discipline, and benign asset quality are expected to support sustained earnings improvement. It expects the bank to sustain RoA around the current 0.96 per cent level and improve to 1 per cent by FY28E, broadly in line with the management’s guidance of 13.5 per cent ROE in FY27 and 14.5 per cent in FY28. "We have a BUY rating with a target price of Rs 260, based on 1.0x Jun-28E ABV," Nirmal Bang said.
South Indian Bank target price
Nirmal Bang said South Indian Bank has rebuilt and repositioned itself and is now well placed to scale. The earnings profile is transitioning from turnaround-led profitability to structurally sustainable returns. Resilient margins, healthy loan growth, benign credit costs, positive operating leverage and gradual recovery in fee income should support sustainable RoA of 1.2 per cent, it said.
"As confidence builds around the durability of the transformed franchise and its ability to consistently deliver superior returns, the stock is well positioned for a valuation rerating. We have a BUY rating with a target price of Rs62, implying 1.05x Jun-28E book value," it said.
Nirmal Bang Institutional Equities in its latest banking sector note said it prefers ICICI Bank Ltd for its best-in-class returns and operating performance. It also likes State Bank of India (SBI) as a preferred PSU play, thanks to a sustainable 1.1–1.2 per cent return on assets. Among large banks, the domestic brokerage also likes HDFC Bank Ltd for its attractive valuation of 1.3 times forward standalone book. Nirmal Bang said South Indian Bank, given a rerating opportunity is emerging; and DCB Bank, due to its strong execution, are its mid-sized bank picks.
Nirmal Bang said the performance across its covered banks was broadly healthy in the June quarter (Q1FY27), with loan growth accelerating to 17.2 per cent YoY from 15.1 per cent in Q3FY26.
Sequential expansion, it said, was supported by a recovery in corporate credit among private-sector banks, RAM-led growth at PSU banks, and continued strength in gold loans. Deposit growth, however, remained slower at 12 per cent YoY.
For banks, asset quality remained benign, with average credit cost moderating to 45 basis points from 48 basis points in 4QFY26 and 71 basis points in Q1FY26.
"Operating costs remained disciplined, while fee income was resilient with the usual first-quarter seasonality. Overall, aggregate NII, PPOP, and PAT grew 11 per cent, 7 per cent, and 14 per cent YoY, respectively," Nirmal Bang said in a September 6 note.
The brokerage said system deposit growth accelerated to 14.7 per cent by mid-August, aided by the RBI’s concessional FCNR(B) swap facility, reducing funding gap versus credit growth. FCNR(B) mobilisation increased from $65.4 billion as of August 21 to $127.2 billion by August 31, equivalent to approximately 4.5 per cent of outstanding system deposits. Including ECB and overseas foreign-currency borrowing inflows, total mobilisation under the facility reached $136.4 billion.
"We, consequently, expect system deposit growth to remain robust in the near term. While the trajectory following the closure of the window remains a monitorable, the sizeable mobilisation already achieved should provide a meaningful stock benefit, given the three-to-five-year tenor of eligible deposits. It should improve funding availability, reduce reliance on high-cost domestic bulk deposits, and moderate competitive deposit intensity," Nirmal Bang said.
ICICI Bank target price Nirmal Bang said it expects ICICI Bank to sustain its strong earnings trajectory, supported by healthy credit growth, benign asset quality, resilient NIMs, and sustained fee income momentum. This is expected to drive RoA of 2.3–2.4 per cent.
It suggested 'Buy' rating with a target price of Rs 1,820, based on Rs 1,570 for the standalone bank and Rs 250 per share for subsidiaries.
HDFC Bank target price
For HDFC Bank, Nirmal Bang said healthy credit demand should sustain loan growth momentum, while productivity gains are expected to drive operating leverage. Asset quality remained comfortable, with existing provisions considered adequate for the upcoming ECL transition and no material increase in credit costs expected.
"Margins are likely to recover gradually, supported by lower funding costs through reduced borrowings, improving CASA mix, and a higher retail loan mix. Overall, sustained loan growth, margin recovery, cost discipline, and stable asset quality should support ROA of 1.8– 1.9 per cent. We have a BUY rating with a target price of Rs 1,020," Nirmal Bang said.
SBI target price Nirmal Bang said SBI is well-positioned to deliver ROA of 1.1–1.2 per cent. It expects SBI to sustain healthy earnings, supported by robust credit growth, broadly in line with system growth, resilient margins, strong fee income, disciplined cost control, and benign asset quality.
"We have a BUY rating with a target price of Rs 1,275, based on 1.35x Jun-28E standalone ABV plus Rs 250/share for subsidiaries," it said.
DCB Bank share price target
Nirmal Bang said healthy loan growth, gradual NIM expansion, stronger fee income, continued cost discipline, and benign asset quality are expected to support sustained earnings improvement. It expects the bank to sustain RoA around the current 0.96 per cent level and improve to 1 per cent by FY28E, broadly in line with the management’s guidance of 13.5 per cent ROE in FY27 and 14.5 per cent in FY28. "We have a BUY rating with a target price of Rs 260, based on 1.0x Jun-28E ABV," Nirmal Bang said.
South Indian Bank target price
Nirmal Bang said South Indian Bank has rebuilt and repositioned itself and is now well placed to scale. The earnings profile is transitioning from turnaround-led profitability to structurally sustainable returns. Resilient margins, healthy loan growth, benign credit costs, positive operating leverage and gradual recovery in fee income should support sustainable RoA of 1.2 per cent, it said.
"As confidence builds around the durability of the transformed franchise and its ability to consistently deliver superior returns, the stock is well positioned for a valuation rerating. We have a BUY rating with a target price of Rs62, implying 1.05x Jun-28E book value," it said.