Jefferies has identified seven Indian financial stocks as top buy recommendations, spanning banks, non-banking financial companies (NBFCs) and insurers. The selections reflect expectations of robust credit growth, improving asset quality and sustained profitability across the sector through fiscal year 2029.
The brokerage’s top pick is ICICI Bank, with a price target of Rs 1,750 by September 2028 based on 2.3 times adjusted book value. Analysts project a 15% expansion in the bank’s credit portfolio and a 13% rise in core profit by fiscal 2029, alongside a return on equity (ROE) of 17% in fiscal 2027. ICICI Bank’s retail deposit growth of 15% year-over-year is noted as the strongest in the sector, supported by solid asset quality in SME and unsecured lending segments.
Axis Bank follows with a target of Rs 1,700, also by September 2028, based on 1.7 times adjusted book value. The bank is expected to grow credit and deposits by 14% through fiscal 2029, with core profit rising 17% and ROE reaching 14% in fiscal 2027. Asset quality improvements are highlighted, with the non-performing asset (NPA) ratio at 2.1% and credit costs stabilizing between 70 and 75 basis points.
State Bank of India, the country’s largest state-owned lender, has a target of Rs 1,320 by June 2028 based on 1.5 times adjusted book value. The bank is projected to expand its credit book by 13% and core profit by 12% through fiscal 2029, with an ROE of 15% in fiscal 2027. Its retail deposit growth of 14% year-over-year is cited despite a 22% market share in deposits.
Among NBFCs, Bajaj Finance is favored with a target of Rs 1,280 by September 2028 based on five times book value. The company is expected to grow assets under management by 22% to 24%, with profit growth exceeding 25% over the coming years and an ROE of 21%. Asset quality trends are also improving.
Cholamandalam Finance is recommended with a target of Rs 2,100 by September 2028 based on 3.6 times book value. The firm is projected to deliver 28% earnings-per-share growth and an ROE of 20% between fiscal 2026 and 2028, with assets under management expanding by 21% in fiscal 2027.
In insurance, SBI Life is highlighted as a top pick with a target of Rs 2,600 by September 2028, implying 16 times the value of new business. The insurer is expected to grow equivalent annual premiums by 15% from current levels, expand new business margins by 140 basis points to 29%, and maintain a return on embedded value above 17%.
Star Health & Allied Insurance is also recommended, with a target of Rs 725 by September 2028 based on 25 times earnings per share. The private health insurer is projected to increase gross premiums by 15% between fiscal 2026 and 2029, with earnings-per-share growth of 24% and an ROE improving to 16% by fiscal 2029. The company reported a 40% year-over-year rise in fourth-quarter net profit and a 17.8% increase in gross written premiums.
