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JPMorgan has revised earnings estimates, price targets, and ratings across a mix of public sector, mid-sized banks, NBFCs, and real estate firms. The brokerage, in its note on Wednesday, said it preferred public sector undertakings and real estate developers over mid-sized private banks and NBFCs due to pressure from narrowing net interest margins, policy easing, and slower growth in the NBFC space.
The brokerage remains positive on real estate developers and REITs, citing stable pre-sales and cash flow. In the banking space, it favours PSU banks over mid-sized peers, expecting temporary EPS weakness in financial year 2026, but stronger volume-led profit growth in fiscals 2027-2028, as easing policy supports asset growth and profitability recovery.
The brokerage downgraded Federal Bank Ltd. from ‘overweight’ to ‘neutral’ and trimmed the target price to Rs 210 from Rs 215. The downgrade is based on the view that return on assets expansion will take time as the bank undergoes structural transformation, including expanding outside Kerala and increasing its focus on mid-yield loans. JPMorgan believes near-term expectations may not materialise, which could disappoint investors.
IndusInd Bank Ltd. saw a more significant downgrade from ‘neutral’ to ‘underweight’, with the target price sharply reduced to Rs 550 from Rs 1,100. The brokerage cited concerns over the bank’s pre-provision operating profit RoA, which is expected to remain under pressure for an extended period.
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