If you are looking for some high-return investment opportunities in the banking sector, you may want to consider these bank stocks that are trading below Rs 100 and have strong growth potential. According to various analysts and brokerage firms, these stocks can offer up to 45% returns in the next one year.
- Bank of India: This public sector bank has been improving its asset quality and profitability in the recent quarters. It has also benefited from the government’s capital infusion and merger with smaller banks. The bank has a diversified loan portfolio and a strong presence in rural and semi-urban areas. The stock is currently trading at Rs 77.05 and has a target price of Rs 111.5 by ICICI Direct, implying a 44.7% upside potential.
- Indian Bank: This is another public sector bank that has shown resilience amid the Covid-19 pandemic and has reported healthy growth in net interest income and net profit. The bank has also maintained adequate capital adequacy ratio and provision coverage ratio. The bank has a strong retail franchise and a low-cost deposit base. The stock is currently trading at Rs 281.9 and has a target price of Rs 400 by ICICI Direct, implying a 41.9% upside potential.
- Punjab National Bank: This is the second-largest public sector bank in India after the merger with Oriental Bank of Commerce and United Bank of India. The bank has a pan-India network of branches and a diversified customer base. The bank has been focusing on improving its asset quality, operational efficiency and digital transformation. The stock is currently trading at Rs 47.13 and has a target price of Rs 66 by ICICI Direct, implying a 40% upside potential.
- Union Bank of India: This is another public sector bank that has merged with Andhra Bank and Corporation Bank to create a larger entity with enhanced scale and reach. The bank has been rationalizing its branch network, optimizing its cost structure and strengthening its digital capabilities. The bank has also improved its asset quality and capital adequacy ratio. The stock is currently trading at Rs 67.35 and has a target price of Rs 90 by ICICI Direct, implying a 33.6% upside potential.
- Bank of Baroda: This is one of the leading public sector banks in India that has merged with Vijaya Bank and Dena Bank to create a stronger entity with higher market share and operational synergies. The bank has a well-balanced loan mix, a robust deposit franchise and a diversified fee income stream. The bank has also been proactive in managing its asset quality and provisioning requirements. The stock is currently trading at Rs 170 and has a target price of Rs 225 by ICICI Direct, implying a 32.4% upside potential.
- UCO Bank: This is a small-cap public sector bank that has been under the prompt corrective action (PCA) framework of the Reserve Bank of India (RBI) since 2017 due to its high non-performing assets (NPAs) and low capital adequacy ratio. However, the bank has been making efforts to improve its financial performance and exit the PCA framework soon. The bank has received capital infusion from the government and has reduced its NPAs significantly. The stock is currently trading at Rs 25.19 and has a target price of Rs 30 by ICICI Direct, implying a 19% upside potential.
- Central Bank of India: This is another small-cap public sector bank that has been under the PCA framework since 2017 due to its high NPAs and low capital adequacy ratio. However, the bank has also shown signs of improvement in its financial performance and asset quality in the recent quarters. The bank has received capital infusion from the government and has increased its provision coverage ratio. The stock is currently trading at Rs 24.74 and has a target price of Rs 29 by ICICI Direct, implying a 17% upside potential.
Disclaimer: This blog post is for informational purposes only and does not constitute any investment advice or recommendation. Investors should do their own research and analysis before investing in any stocks mentioned here.
