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Motilal Oswal Picks Top Banking Stocks: ICICI, SBI, Kotak Lead for Strong Growth
M
Moneycontrol•05-10-2026, 10:35
Motilal Oswal Picks Top Banking Stocks: ICICI, SBI, Kotak Lead for Strong Growth
- •Motilal Oswal Securities identifies ICICI Bank, State Bank of India, Kotak Mahindra Bank, and AU Small Finance Bank as top picks in the banking sector.
- •The brokerage projects a 15% earnings CAGR for the banking sector over FY26-28E, primarily driven by private banks.
- •Systemic credit growth remained robust at 18.8% YoY as of September 15, fueled by retail demand, MSME utilization, and corporate borrowings.
- •Deposit growth surged to 17% YoY, with FCNR(B) inflows of $133 billion helping to ease the CD ratio to 80.8%.
- •Motilal Oswal anticipates private banks' PAT to grow 24% YoY in 2QFY27 and PSU banks' PAT to increase by 27% YoY, with resilient asset quality across the sector.
Key Questions Answered
Motilal Oswal has named ICICI Bank, State Bank of India, Kotak Mahindra Bank, and AU Small Finance Bank as its top picks, projecting the banking sector to achieve a 15% earnings CAGR over FY26-28E.
Systemic credit growth reached 18.8% due to sustained retail demand, MSME borrower utilization, healthy corporate borrowings, and higher-than-expected FCNR(B) flows of $133 billion, which helped cool the CD ratio from 83.4% to 80.8%.
Motilal Oswal expects private banks' PAT to grow 24% YoY in 2QFY27 with a 20% earnings CAGR over FY26-28, while PSU bank PAT is projected to grow 27% YoY with an 11% earnings CAGR and resilient asset quality.
