HDFC Bank, ICICI Bank, SBI, Bajaj Finance, Kotak Bank shares offer up to 41% upside; fresh target prices

In a latest sector update, domestic brokerage firm Axis Securities noted that the industry is marching towards margin stabilisation and improving asset quality. The Brokerage sees upside potential in these select banking and NBFC stocks, such as ICICI Bank Ltd, Kotak Mahindra Bank Ltd, State Bank of India (SBI), HDFC Bank Ltd, Bajaj Finance Ltd, and others

The brokerage highlighted that Bank Nifty has fallen 15% since the start of the West Asia war on February 28, 2026. “Within the banking pack, PSU Banks have seen a slightly higher correction vs their private peers, as has been the case during several other market corrections historically,” it said.

Axis cautions that a prolonged West Aisa crisis could derail growth, as intense competition for deposits to fuel credit expansion might push the cost of funds higher, subsequently squeezing lender margins.

Axis has named ICICI Bank, Kotak Mahindra Bank, SBI, Federal Bank Ltd, AU Small Finance Bank Ltd, Ujjivan Small Finance Bank Ltd, Shriram Finance Ltd, Bajaj Finance, and Can Fin Homes Ltd as its overall preferred stock picks

For HDFC Bank, Axis maintained a ‘Buy’ recommendation, with a target price of Rs 1,020 on the stock. “However, among the larger private banks, we believe the re-rating for HDFCB has been pushed back, given the recent governance overhang,” Axis said. The stock has faced recent selling pressure after Chairman Atanu Chakraborty’s resignation.

Axis has tagged a 'Buy' rating on Kotak Bank with a target price of Rs 515. At last check on Thursday, Kotak Bank shares were trading 2.22% lower at Rs 364.25 apiece on the BSE. From current levels, the Axis target price on the stock is hinting at a potential upside of over 41%, making it one of the highest upside potentials in the brokerage's coverage list.

For other banking heavyweights, the brokerage recommends a 'Buy' on ICICI Bank, setting a target price of Rs 1,700. SBI also has a 'Buy' nod with a target price of Rs 1,350, while Federal Bank is rated 'Buy' with a Rs 320 price target.

In the small finance banking space, Axis remains bullish on AU Small Finance Bank and Ujjivan Small Finance Bank, assigning them 'Buy' ratings with target prices of Rs 1,160 and Rs 74, respectively.

In the NBFC segment, the brokerage has a 'Buy' rating on Bajaj Finance with a target price of Rs 1,150. Shriram Finance and Can Fin Homes both carry 'Buy' recommendations with target prices set at Rs 1,200 and Rs 1,125, respectively.

“However, for both banks and NBFCs, we remain vigilant regarding the pressures posed by the geopolitical headwinds in West Asia, which could disrupt growth momentum, impact NIMs and weigh on the asset quality of lenders,” the brokerage noted.