ICICI Bank, SBI, Axis Bank Are Jefferies' Top Picks As Rate Hikes Could Lift Bank Earnings
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- ✓Jefferies named ICICI Bank, SBI, and Axis Bank as top picks as rising interest rates could boost bank earnings.
- ✓Analysts Prakhar Sharma and Vinayak Agarwal said the Reserve Bank of India’s shift to “calibrated tightening” means rates may rise by 75–100 basis points, helping banks with many policy-linked loans.
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- India Economy
Jefferies On Indian Financials: The Reserve Bank of India's shift to a “calibrated tightening” stance could turn higher interest rates into an earnings catalyst for Indian banks, according to Jefferies analysts Prakhar Sharma and Vinayak Agarwal.
The brokerage now sees scope for 75–100 basis points of further rate hikes, well above the earlier 50-basis-point expectation, and prefers banks over NBFCs.
Jefferies has named ICICI Bank, State Bank of India and Axis Bank as its top picks among large-cap banks. The brokerage believes banks with higher exposure to policy-rate-linked loans and manageable loan-to-deposit ratios could see earnings benefits over the next three to six months.
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