Banking Stocks in India to Invest In
Posted by : sachet | Tue Jan 28 2025
Banks often provide liquidity to business enterprises and people like us. Investing in banking stocks could be a stepping stone to generating wealth in the coming years. Because of their high growth potential, investors can earn healthy returns. Banks in India are divided into three different categories: Public Sector Banks, Private Sector Banks, and Small Finance Banks. This piece will review the list of bank stocks in India and their PE (Price-to-Earnings) ratios. Keep scrolling to explore.
Banking Sector in India: An Overview
India’s banking sector upholds the network of small and giant financial institutions to offer financial services such as deposits, lending, investing, and transaction facilitation. The RBI (Reserve Bank of India) acclaimed that the banking industry is well-regulated and embraced with innovative models.
The net profit of India’s banking industry has surpassed INR 3,00,000 crores. Also, the government’s initiatives, including Pradhan Mantri Jan Dhan Yojana (PMJDY), Unified Payment Interface (UPI), and Immediate Payment Services (IMPS), influenced the sector’s reach across the country. Now is the right time to explore the best banking sector stocks to buy.
Banking Stocks List
| Stock Name | LTP (in ₹) | Market Capitalisation (in ₹ Cr.) | 52-Week High (in ₹) | 52-Week Low (in ₹) |
|---|---|---|---|---|
| HDFC Bank Ltd. | 1,736.00 | 13,32,000 | 1,794.00 | 1,363.55 |
| ICICI Bank Ltd. | 1,244.00 | 8,81,000 | 1,362.35 | 914.75 |
| SBI Ltd. | 802.40 | 7,15,000 | 912.00 | 555.15 |
| PNB Ltd. | 100.60 | 1,16,000 | 142.90 | 75.60 |
| Canara Bank Ltd. | 97.34 | 88,740 | 128.90 | 77.80 |
| Bank of Maharashtra Ltd. | 52.27 | 40,290 | 73.50 | 42.85 |
*Data is updated as of 20th November 2024
Overview of Banking Stocks in India
- HDFC Bank Ltd.
HDFC Bank Ltd. is an Indian financial services corporation founded in 1994 and is headquartered in Mumbai, Maharashtra. The bank operates with around 8,700 branches across the country and over 20,000 ATMs. The key services of this financial institution include retail banking, lending, credit cards, facilitation of transactions, and wholesale banking. Recently, in August 2024, HDFC Bank Ltd. announced its user-lever programmability on Digital Ruppe. It will help users to make a guaranteed payment on every transaction.
The RBI (Reserve Bank of India) considered it a D-SIB (Domestic Systematically Important Bank), which means it is too big to fail. This accreditation of RBI made HDFC Bank Ltd. one of the top banking stocks in India to buy. The market capitalisation of this bank is INR 13,32,000 crores, and its PE (Price-to-Earnings) ratio is 19.15.
- ICICI Bank Ltd.
The company was founded in January 1955 and is headquartered in Mumbai, Maharashtra. ICICI Bank owns over 6,600 branches and 16,100 ATMs in India. Moreover, giant network influenced the bank’s presence in more than 10 nations, including Singapore, Hong Kong, China, the United States, and more.
ICICI Bank’s iMobile Pay provides hundreds of services to more than 10 million active users in India. The successful launch and establishment of this interoperable application gathered the attention of various investors seeking higher returns from the top banking stocks in India. The market capitalisation of INR 8,81,000 crores, and its PE (Price-to-Earnings) ratio is 18.78.
- SBI Ltd.
SBI (State Bank of India) Ltd. has a legacy of more than 200 years and has received accreditation for being the most trusted bank in India. It was founded in 1955 but came from its predecessor, the Imperial Bank of India. SBI is currently headquartered in Mumbai, Maharashtra, and holds around 23% of the market share. In 2024, this bank ranked 55th in Forbes Global 2000.
SBI owns around 2,400 branches to operate and 11,300 camps for PMJDY. Not only in India, but this financial institution is also excelling in foreign nations such as Nepal, South Korea, the United States, and more. The market capitalisation of this bank stock in India is INR 7,15,000 crores, and its PE (Price-to-Earnings) ratio is 10.01.
- PNB Ltd.
PNB Ltd. is the 2nd largest public sector bank (PSB), founded in 1894 and headquartered in Dwarka, Delhi. With over 150 years of legacy in the industry, PNB has created a customer base of 180 million people. The bank owns over 12,200 branches and 13,000+ ATMs in India. Management’s impeccable banking strategy played an important role in influencing its global presence in nations like Dubai, Kabul, Hong Kong, Australia, and more.
The best part of PNB Ltd. is its 24×7 WhatsApp banking services launched in 2022. The immense potential to serve customers encouraged most investors to invest in this one of the top banking stocks in India. The market capitalisation of this stock is INR 1,16,000 crores, and its PE (Price-to-Earnings) ratio is 7.67.
- Canara Bank Ltd.
Canara Bank Ltd. was founded in 1906 and is headquartered in Banglore. This bank owns and operates with 9,700+ branches and over 13,400 ATMs. The bank is involved in providing different financial services to its customers, including lending, facilitating transactions, depositing, retail banking, and business banking. Despite the robust domestic presence, Canara Bank Ltd. also operates in areas such as London, Dubai, and New York.
Over the past few decades, the bank’s revenue has shown 19.19% annual growth and it holds around 10.13% of the whole market share in the country. The market capitalisation of this stock is INR 88,740 crores, and its PE (Price-to-Earnings) ratio is 5.52.
- Bank of Maharashtra Ltd.
Bank of Maharashtra Ltd is a public sector bank founded in 1935 to serve businesses and individuals with their financial needs. It operates with around 30 million customers and 2200+ branches in India. Investors are showing their keen interest in this one of the top banking stocks in India as it has the capability of adopting the latest technology in a timely manner and catering to products and services. Some of the banking services from their portfolio include business banking, retail banking, money lending, and so on.
Recently, the bank announced a 44% rise in its net profitability, which encouraged most investors to invest. This bank’s high growth potential to deliver healthy returns is a key reason for investors’ retention. The market capitalisation of this stock is INR 40,290 crores, and its PE (Price-to-Earnings) ratio is 7.67.
Top Banking Stocks With PE Ratio
| Stock Name | PE (Price-to-Earnings) Ratio |
|---|---|
| ICICI Bank Ltd. | 18.78 |
| HDFC Bank Ltd. | 19.15 |
| SBI Ltd. | 10.01 |
| Bank of Maharashtra Ltd. | 7.55 |
| PNB Ltd. | 7.67 |
| Canara Bank Ltd. | 5.52 |
*Data is updated as of 20th November 2024
How to Invest?
It is good to invest in banking stocks in India. But for some beginners, it could be complex. Start investing now with this step-by-step guide.
- Reach out to a broker and open your demat account.
- Get all the documents verified to eliminate the hurdles in your investing practices.
- Add the required funds to your demat account.
- Research bank stocks or use stock advisory platforms like Univest to create a diversified portfolio.
- Select bank stocks and enter the quantities you wish to buy.
- Review your order and complete the transaction on the current market price of the stock.
To Conclude
Top banking stocks in India seems to be an opportunity for investors looking to diversify their portfolios. With a net profit of over INR 3,00,000 crores, the industry has provided immense growth to investors in terms of capital appreciation and dividend payouts. The adoption of digital technology and UPI brought a drastic reform and could take the banking sector to a new high. Conduct your research to invest in the bank stocks, or you can also get assistance from the best stock advisories available in the market.
FAQs
1. Is the banking sector resilient to economic downturns?
Ans. Yes, the banking sector stocks are resilient to long-term economic downturns. But, these can also be affected by economic conditions in a short time. Investors consider these shares as they have the potential to rise up faster than other sector’s stocks. Conduct your own research before investing in any stocks to earn stable returns.
2. Who should invest in banking stocks?
Ans. Here are the types of investors for whom bank stocks could be a stepping stone.
- Dividend-Oriented: Banking stocks generally announce high dividend payouts for their investors. Investors seeking high dividend income can choose these stocks and earn regular income from their investments.
- Risk-Taker: Investors with moderate risk tolerance capabilities can surely consider bank stocks in India as they offer exposure to the financial sector with low risk in the long term.
- Long-Term Oriented: Bank stocks can offer higher returns of around 100% to 200%, but mainly in the long run. Investors seeking to hold stocks for more than 12 months can invest in such shares and generate higher returns.
3. Which bank stocks are good to buy now?
Ans. Here are some of the top banking sector stocks that have the potential to generate higher returns in the coming years.
- HDFC Bank Ltd. (NSE: HDFCBANK)
- ICICI Bank Ltd. (NSE: ICICIBANK)
- SBI Ltd. (NSE: SBIN)
- PNB Ltd. (NSE: PNB)
- Canara Bank Ltd. (NSE: CANBK)
- Bank of Maharashtra Ltd. (NSE: MAHABANK)
4. Is investing in banking sector stocks worth it?
Ans. Bank stocks have become a popular investment option today. It offers impressive dividend payouts and attractive returns to the investors. Investors are considering investing in such stocks because of its high potential to grow in the upcoming years.
