5 reasons why Morgan Stanley is bullish on ICICI, Axis and HDFC Bank

Morgan Stanley believes the banks could provide aggressively for bad loans (unlike the banking system) and accelerate the pace of loan market share gains as the economy stabilizes

Amid steady uptick in the Covid-19 cases and gradual re-opening of the economy, Indian banks seem to be walking on the tightrope. In the wake of these two conflicting scenarios, outlook on the banking sector has remained subdued due to a lack of clarity around bad loans (non-performing asset) cycle and growth outlook.

Despite this, analysts at Morgan Stanley have turned positive on HDFC Bank, Axis Bank, and ICICI Bank, and believe they are at the inflexion point of growth trajectory.

“We expect earnings to inflect for large private banks in H2F21. They could provide aggressively for bad loans (unlike