HDFC Bank, ICICI Bank, Axis Bank, RBL Bank, IndusInd Bank, BOB, SBI: Target prices

IIFL Securities suggested 'Buy' on  HDFC Bank, ICICI Bank, Axis Bank and RBL Bank in its latest note on banking sector. It suggested 'Sell' on IndusInd Bank and 'Add' rating on Kotak Mahindra Bank Ltd, Federal Bank and State Bank of India (SBI). A reduce rating is assigned to Bank of Baroda (BoB).  

The brokerage said global uncertainty has started to drag MSME activities, with loan gr decelerating to 13 per cent YoY in April 2026 from 20 per cent in December 2025. The slowdown is more pronounced for manufacturing and trading activities, and for PSUs, it said adding that there is also marginal asset quality deterioration, with PAR30-plus rising 40 basis points month-on-month, but it seems largely seasonal for now. 

"Stress has increased relatively more for micro and small borrowers, PSU lenders, cash credit & term loan products, manufacturing & service industries. We believe ECLGS 5.0 should cushion further impact as the earlier schemes had improved the credit activity, fund utilisation, and lowered NPA and forward flow rates. However, we shall monitor the AQ trends closely," IIFL Securties said.

This is given that SME loans have grown faster than corporate and retail loans across the banks in the last three years, and MSME loans now constitute over 15 per cent of total loans for Karur Vysya Bank (KVB), YES Bank, AU SFB, ICICI Bank, Federal Bank, Bandhan Bank and HDFC Bank.  

IIFL Securities said the government has announced ECLGS 5.0 in May to tide over the challenges from the West Asia conflict. 

"It will provide 100 per cent credit guarantee coverage for the loans given to standard MSMEs, with the quantum capped at Rs 100 crore per borrower. This can drive additional credit flow of Rs 2.55 lakh (5 per cent of o/s MSME loans), with Rs 35,0000 crore being already sanctioned until end-May," IIFL Securities said.

It believes ECLGS 5.0 should cushion the potential impact as the earlier schemes had improved the credit activity, fund utilisation, and ) lowered NPA and forward flow rates. 

IIFL Securities suggested targets of Rs 940 on HDFC Bank, Rs 1,630 on ICICI Bank, Rs 1,650 on Axis Bank, Rs 426  on Kotak Mahindra Bank Ltd, Rs 740 on IndusInd Bank, and Rs 300 on Federal Bank. The brokerage finds RBL Bank worth Rs 370, SBI at  Rs 1,150 and BoB at Rs 283.