YES Bank, Kotak, HDFC, IndusInd, Bandhan Bank: Nomura revises share price targets
Bank stocks: Nomura retained a ‘Neutral’ rating on AU Small Finance Bank with a lower target price of Rs 915 from Rs 930, and on YES Bank Ltd with the target price cut to Rs 21 from Rs 22.
- Mar 24, 2026,
- Updated Mar 24, 2026 12:32 PM IST
Nomura in its latest banking note said it preferred banks that scored well on two dimensions: residual liquidity coverage ratio (LCR) headroom, which indicates near-term loan growth capacity independent of deposit momentum, and liability franchise quality, which determines net interest margin (NIM) resilience. The foreign brokerage said Kotak Mahindra Bank Ltd (KMB) scored best on both fronts, with LCR of 135 per cent, CASA at 41 per cent, borrowings at 5 per cent, retail deposits at 66 per cent and its valuation at 1.5 times FY27 book value per share, which it finds inexpensive.
"We upgrade KMB to Buy (from Neutral). Axis Bank Ltd (Buy), whose liability franchise is relatively weaker vs peers, offers the strongest earnings CAGR of 24% over FY26-28F, and trades at an attractive valuation. ICICI Bank (Buy) is our preferred compounder, with a sector-leading profitability profile," it said.
Nomura said it maintained a ‘Buy’ rating on Axis Bank with a revised target price of Rs 1,500 from Rs 1,540. It retained a ‘Neutral’ rating on Bandhan Bank Ltd while raising the target price to Rs 175 from Rs 160. The brokerage upgraded KMB to ‘Buy’ from ‘Neutral’, even as it trimmed the target price to Rs 445 from Rs 460.
Nomura maintained a ‘Buy’ rating on HDFC Bank but cut the target price to Rs 940 from Rs 1,080. It also retained a ‘Buy’ rating on IDFC First Bank with a lower target price of Rs 80 from Rs 105, and on IndusInd Bank Ltd with the target price reduced to Rs 945 from Rs 1,000. Bank of Baroda was kept at ‘Buy’ with the target price revised down to Rs 320 from Rs 330.
The brokerage continued to remain positive on ICICI Bank, maintaining a ‘Buy’ rating while lowering the target price to Rs 1,535 from Rs 1,735. It retained a ‘Neutral’ rating on AU Small Finance Bank with a lower target price of Rs 915 from Rs 930, and on YES Bank Ltd with the target price cut to Rs 21 from Rs 22. Nomura also maintained a ‘Buy’ rating on State Bank of India (SBI), trimming the target price to Rs 1,205 from Rs 1,235.
"The improvement in system credit growth from 10 per cent to 14.9 per cent YoY since mid-2025 has been built on borrowed time. The acceleration has been funded by banks drawing down liquidity buffers – not by strong deposit mobilisation – with the system credit-deposit (CD) ratio rising to 82 per cent vs 10-year average of 75 per cent, and LCRs declining across the board," Nomura said.
As these buffers moderate, the brokerage said sustaining credit growth will require deposit growth to pick up.
Government spending and forex inflows, the two key enablers are both currently running below what is needed.
"Meanwhile, funding costs are rising despite policy easing, as the structural gap between credit and deposit growth keeps marginal funding costs elevated. We revise NIM estimates lower across the sector. We find that banks with higher residual liquidity buffers and stronger liability franchises are best placed in this environment – KMB stands out most clearly on both counts, and we upgrade it to Buy. Top picks: KMB, followed by Axis Bank and ICICI Bank," it said.
Nomura in its latest banking note said it preferred banks that scored well on two dimensions: residual liquidity coverage ratio (LCR) headroom, which indicates near-term loan growth capacity independent of deposit momentum, and liability franchise quality, which determines net interest margin (NIM) resilience. The foreign brokerage said Kotak Mahindra Bank Ltd (KMB) scored best on both fronts, with LCR of 135 per cent, CASA at 41 per cent, borrowings at 5 per cent, retail deposits at 66 per cent and its valuation at 1.5 times FY27 book value per share, which it finds inexpensive.
"We upgrade KMB to Buy (from Neutral). Axis Bank Ltd (Buy), whose liability franchise is relatively weaker vs peers, offers the strongest earnings CAGR of 24% over FY26-28F, and trades at an attractive valuation. ICICI Bank (Buy) is our preferred compounder, with a sector-leading profitability profile," it said.
Nomura said it maintained a ‘Buy’ rating on Axis Bank with a revised target price of Rs 1,500 from Rs 1,540. It retained a ‘Neutral’ rating on Bandhan Bank Ltd while raising the target price to Rs 175 from Rs 160. The brokerage upgraded KMB to ‘Buy’ from ‘Neutral’, even as it trimmed the target price to Rs 445 from Rs 460.
Nomura maintained a ‘Buy’ rating on HDFC Bank but cut the target price to Rs 940 from Rs 1,080. It also retained a ‘Buy’ rating on IDFC First Bank with a lower target price of Rs 80 from Rs 105, and on IndusInd Bank Ltd with the target price reduced to Rs 945 from Rs 1,000. Bank of Baroda was kept at ‘Buy’ with the target price revised down to Rs 320 from Rs 330.
The brokerage continued to remain positive on ICICI Bank, maintaining a ‘Buy’ rating while lowering the target price to Rs 1,535 from Rs 1,735. It retained a ‘Neutral’ rating on AU Small Finance Bank with a lower target price of Rs 915 from Rs 930, and on YES Bank Ltd with the target price cut to Rs 21 from Rs 22. Nomura also maintained a ‘Buy’ rating on State Bank of India (SBI), trimming the target price to Rs 1,205 from Rs 1,235.
"The improvement in system credit growth from 10 per cent to 14.9 per cent YoY since mid-2025 has been built on borrowed time. The acceleration has been funded by banks drawing down liquidity buffers – not by strong deposit mobilisation – with the system credit-deposit (CD) ratio rising to 82 per cent vs 10-year average of 75 per cent, and LCRs declining across the board," Nomura said.
As these buffers moderate, the brokerage said sustaining credit growth will require deposit growth to pick up.
Government spending and forex inflows, the two key enablers are both currently running below what is needed.
"Meanwhile, funding costs are rising despite policy easing, as the structural gap between credit and deposit growth keeps marginal funding costs elevated. We revise NIM estimates lower across the sector. We find that banks with higher residual liquidity buffers and stronger liability franchises are best placed in this environment – KMB stands out most clearly on both counts, and we upgrade it to Buy. Top picks: KMB, followed by Axis Bank and ICICI Bank," it said.