State Bank of India, HDFC Bk, ICICI Bk shares have more upside, finds study

Large Indian banks rank among the most attractive share price opportunities in the Asia-Pacific banking universe, alongside their Chinese peers, according to data and analysis from S&P Global Market Intelligence.

 

Among the 20 largest Asia-Pacific lenders by market capitalisation, Indian banks feature prominently on implied upside estimates, reflecting a meaningful gap between current stock prices and analysts’ target levels. 

 

S&P Global Market Intelligence data compiled on January 21 shows that three Indian banks account for a major share of regional upside potential, even as several peers trade closer to fair value.

 

HDFC Bank, India’s largest lender by market capitalisation at about $157.4 billion, recorded an implied upside of 24.3 per cent, ranking third overall in the regional sample. The stock also offers a one-year total return potential of 14.3 per cent, according to the data. Analysts continue to see scope for rerating, supported by expectations of steady loan growth, easing credit costs and stable margins.

 

“India's largest bank by market capitalisation, HDFC Bank, had the widest gap between its stock price and analysts' price target among the South Asian country's banks, at 24.3 per cent, to rank third on the regional list,” S&P Global Market Intelligence study showed.  ALSO READ | SBI up 6% in Jan, pips ICICI Bank in market cap ranking after 6 years 

ICICI Bank, with a market capitalisation of roughly $108.1 billion, followed closely with an implied upside of 23.9 per cent, placing it fourth among Asia-Pacific peers. The bank’s estimated one-year total return stands at 12.4 per cent, underpinned by strong profitability metrics and a healthy balance sheet.

 

State Bank of India (SBI), the country’s largest lender by assets, showed a relatively lower implied upside of 7.5 per cent, despite a market capitalisation of about $105.1 billion. SBI’s limited upside reflects its strong stock performance over the past year, with a total return of 35.7 per cent, one of the highest among large regional banks. 

Source: S&P Global Market Intelligence

 

Overall, 11 of the 20 largest Asia-Pacific lenders with positive implied upside are based in China or India. Chinese banks dominate the upper end of the rankings, led by China Merchants Bank Co. Ltd., which retained the top position for the second consecutive quarter with an implied upside of 36.7 per cent. The lender’s upside is more than three times the group median of 11.4 per cent. Industrial Bank Co. Ltd. ranked second with an implied upside of 25.2 per cent, while Postal Savings Bank of China posted an upside of 22.1 per cent. All eight Chinese banks in the sample recorded implied upside above the median.  ALSO READ | CSB Bank slips 8% in trade; down over 19% in 2 days post Q3; check details 

Contrastingly, banks from Japan and Australia show limited or negative upside. Commonwealth Bank of Australia, the region’s largest lender by market value at $169.7 billion, showed an implied downside of 19.8 per cent, while ANZ Group and Westpac Banking Corp. also indicated negative upside.

 

Despite muted share price expectations, profitability remains strong in select markets. Commonwealth Bank posted the highest EPS estimate at $4.12 for FY26, followed by DBS Group at $4.09, Mizuho Financial Group at $3.80 and Sumitomo Mitsui Financial Group at $3.45.

 

That said, the S&P Global Market Intelligence data highlights that while Chinese banks dominate the top of the upside rankings, Indian lenders continue to stand out regionally, supported by resilient earnings profiles and strong investor confidence in India’s banking growth outlook.     Disclaimer: The views or investment tips expressed by the brokerage/ratings or data firm in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.