Shares of Bajaj Finance and State Bank of India rose up to 2% on September 3 as global brokerage CLSA identified them as its top lending picks on growth, valuation comfort.
CLSA forecasts Bajaj Finance to post mid-20% loan growth in FY25, alongside improving margins and lower credit costs.
Investors in Indian markets should focus on a mix of sustainable growth outperformers and value stocks during current low-growth phase, said CLSA.
Despite slower overall credit growth, CLSA calls Bajaj Finance a structural growth story, projecting around 20% profit growth through FY25–27, mirroring earlier years.
At 12:35 pm on September 23, Bajaj Finance shares were trading 2% higher at Rs 1,025.45 apiece while SBI stock was trading 1.1% higher at Rs 864.7.
CLSA also terms SBI "a truly valuable" stock due to consistent outperformance over peers, valuation comfort, sustainable loan growth and improving asset quality.
CLSA predicts SBI could reach $100 billion market capitalisation within a year and Bajaj Finance in 2-3 years.
Bajaj Finance shares rose 48% so far in 2025 while SBI gained 8%, outperforming Nifty's 6.2% YTD rise.
Public sector banks are likely to report healthy loan growth in the September quarter, with a moderate decline in net interest margins and stable asset quality, Nuvama Institutional Equities said in a report, reported Informist on September 23.
SBI is expected to report 3% loan growth compared to the previous quarter. SBI's net interest margin is likely to fall 5%, said Nuvama.
The brokerage also said SBI would be able to maintain return on assets of above 1% in the reporting quarter due to higher core income.
With inputs from Reuters
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