The brokerage firm Motilal Oswal has launched its latest Smart Basket – FinRise Market, spotlighting five high-conviction picks from the Banking and NBFC space. With a forecasted upside of 10% to 15% over the next 12 months, this curated basket includes Kotak Mahindra Bank, Cholamandalam Investment & Finance, Paytm (One 97 Communications), Poonawalla Fincorp, and PNB Housing Finance.
“Banks are well-positioned to outperform, supported by robust balance sheets and the ability to navigate macro-economic uncertainties,” the brokerage said in its latest note.
Let’s take a look each of these stocks and what does it means:
Kotak Mahindra Bank
Kotak Mahindra Bank has shown a steady performance with consistent margins and profitability over the last year. According to the brokerage, “With the RBI lifting significant regulatory restrictions imposed on the bank, we expect business growth and underlying profitability to pick up, with stronger traction in the consumer banking business.” The brokerage sees this as a key trigger for upside in the stock.
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Cholamandalam’s diversified portfolio and growing digital presence have made it a strong candidate for the basket. As per the report, management expects net interest margins (NIMs) to improve as interest rates ease. The company is also targeting 24% AUM CAGR between FY24 and FY27, driven by vehicle finance and personal/business loans on its digital platform.
Paytm (One 97 Communications)
Despite regulatory hurdles, Paytm has retained a merchant base of 43 million and is scaling its loan distribution business through FLDG (First Loss Default Guarantee) partnerships. As per the brokerage report, the company expects a 24% GMV CAGR and a 25% revenue CAGR between FY25 and FY27.
Poonawalla Fincorp
Poonawalla Fincorp is in transformation mode. From offering four financial products, it now plans to expand to ten products and open 400 new branches starting 1QFY26. This aggressive expansion strategy is expected to fuel 30-40% AUM growth over FY26-27, according to the brokerage firm Motilal Oswal.
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The brokerage firm in its report noted that PNB Housing is aiming high, with plans to scale its retail loan book to Rs 1 lakh crore by FY27,
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