The Q1 FY24 earnings season remained a good one for the banks, except for a few such as SBI (NS:SBI) which disappointed investors. As the banking space is the primary driver behind India’s growth story, this sector has remained on the FIIs buying list in recent months.
Here’s a list of 3 banks that topped the buying spree by these biggies. Interestingly, all 3 of them are private-sector lenders.
RBL Bank Limited
RBL Bank (NS:RATB) is the smallest bank on the list, with a market capitalization of INR 13,148 crore and trades at a TTM P/E ratio of 12.76, compared to the sector’s average of 16.24. Its Q1 FY24 revenue jumped 24.6% YoY to INR 3,509.76 crore and the net income surged by 53.1% to INR 319.49 crore, the highest in the last 10 quarters, at least.
The stock is one of the best performers in the last 12 months, delivering a massive 115.9% gain. FIIs have increased their stake by 3.62% (QoQ) in the June 2023 quarter, totaling 28.28%, making it their favorite among all banks.
Axis Bank Limited
Axis Bank (NS:AXBK) is the next one on the list, with a market capitalization of INR 2,88,507 crore and trades at a TTM/PE ratio of 23.15, making it slightly more expensive than the industry’s average of 16.24. The bank‘s performance was impressive with a 41% YoY rise in revenue to INR 31,894.2 crore, while net income soared 39.1% to INR 6,077.21 crore.
The stock has rallied 24.5% in the past 1 year, while the Nifty Bank index is up 12.4%, marking a 2x outperformance by the former. FIIs ramped up their stake by 2.62% (QoQ) to 50.48% in the June 2023 quarter. This makes Axis Bank one of the only two banks in the country where FIIs hold more than 50% stake. The other one is HDFC Bank (NS:HDBK).
Kotak Mahindra Bank Limited
Kotak Mahindra Bank (NS:KTKM) is the 4th largest bank in the country with a market capitalization of INR 3,51,437 crore and trades at a TTM P/E ratio of 21.72. Despite being such a large bank, it was able to grow its revenue by a very high rate of 79.1% (YoY) to INR 20,723.91 crore and consequently, the net income surged by 51.5% to INR 4,109.33 crore in the same period.
However, the stock has disappointed investors big time as it has gone absolutely nowhere since November 2020. But FIIs are still loving this counter and increased their stake by 2.12% (QoQ) to 41.55% in Q1 FY24.
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