Banks Q4 Results Preview — DRChoksey Remains Cautiously Optimistic; SBI, ICICI Bank Among Top Picks

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Deven Choksey Report

The banking sector outlook remains cautiously optimistic, with a shift towards measured credit expansion amid tighter underwriting in riskier segments.

Asset quality risks persist, particularly in personal loans and microfinance, warranting a cautious stance. However, the sector remains resilient, supported by strong capital buffers and a shift toward secured lending, ensuring long-term stability.

Banks are currently trading at 1.7 times price/book value for FY27E, significantly below their five-year average industry P/B multiple of 2.8x. This valuation discount reflects concerns around margin compression, elevated credit costs, and moderation in credit growth.

ICICI Bank and SBI remain our preferred picks, given their strong resilience to macroeconomic challenges. Both banks demonstrate robust business momentum, stable asset quality, and superior return ratios, positioning them well for outperformance in a challenging environment.

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