“If you look a lot of the banking numbers are clearly showing that the credit growth is definitely picking up. We believe the large banks that will continue to do well,” he said.
Among large banks, he prefers ICICI Bank, HDFC Bank and State Bank of India. In the midcap space, Federal Bank and AU Small Finance Bank remain his top picks. On the PSU side, Canara Bank and Union Bank of India stand out.
The microfinance segment has begun to see improvement, supported by better numbers from key players. Khemka believes the sector may be close to the bottom of its stress cycle, as asset quality stabilises and collection efficiency improves.
“We have upgraded a Bandhan Bank from a neutral for last five years, we have upgraded the stock to buy. Valuations look very reasonable. FY27 we expect Bandhan Bank always to see a strong recovery from about 0.8% about 1.3-1.5%.”
With improving growth and profitability, the bank’s valuation remains attractive as it is trading below its book value, offering meaningful upside potential. As a result, Bandhan Bank is now a preferred pick in the segment, with the stock upgraded to a buy and a target price of ₹175.Khemka maintains a neutral stance on United Spirits, preferring Radico Khaitan within the alco-beverages space where growth and margin trends are stronger.
Khemka said, “We have a strong buy in Radico numbers have been much above our expectations. The gross margins has seen a sharp improvement, and both volumes growing at about 17% compared to United Spirits, where the volumes declined about 3%.”
On United Spirits, Khemka said the company’s December quarter performance was impacted by weak volumes and higher advertising spends, which weighed on margins. Certain states, including Andhra Pradesh and Maharashtra, also affected performance during the quarter.
While news around a potential value unlocking from the IPL franchise Royal Challengers Bengaluru has boosted sentiment, Khemka believes this is more of a short-term trigger rather than a fundamental shift in business performance. The company continues to push premium and prestige products, but overall volume growth remains muted.
Catch all the latest updates from the stock market here
Also, catch the latest Budget 2026 expectations updates here
Catch all the latest updates from the Q3 earnings here
