Macquarie picks HDFC Bank, LIC as top financial bets; slashes IndusInd Bank target

Macquarie picks HDFC Bank, Axis Bank, LIC as top bets

Global brokerage firm Macquarie listed HDFC Bank, Axis Bank, Aditya Birla Capital (AB Capital), Power Finance Corporation (PFC), Shriram Finance, and LIC as its top picks in India’s financial sector. The firm said it prefers large private sector banks and believes that some Non-Banking Financial Companies (NBFCs) offer better risk-reward opportunities.

Along with this, Macquarie made several changes to its ratings and target prices for various companies in the financial space.

For example, PB Fintech, which runs Policybazaar, was upgraded from “underperform” to “neutral.” The firm also raised its target price from Rs 1,530 to Rs 1,945 per share. Macquarie now expects PB Fintech to grow its revenue at a compound annual growth rate (CAGR) of 35 percent between FY24 and FY27, compared to 29 percent projected earlier.

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On the other hand, IndusInd Bank was hit with a double downgrade—it was cut from “outperform” to “underperform,” and its target price was slashed from Rs 1,210 to Rs 650 per share.

Macquarie said the bank’s return on assets (ROA) could fall from 1.4 percent to 1.0 percent due to shrinking profit margins. It also reduced its earnings per share (EPS) forecasts for the bank by 44 percent for FY26 and 35 percent for FY27.

Kotak Mahindra Bank was also downgraded from “outperform” to “neutral.” However, its target price was raised to Rs 2,300 per share, showing some optimism about its future performance.

SBI Cards was given a “neutral” rating as well, with a target price of Rs 1,040 per share.

Macquarie also downgraded HDFC Life Insurance from “neutral” to “underperform.” Yet, it raised the stock’s target price to Rs 720 per share, suggesting the firm sees temporary pressure on margins but expects things to improve.

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