Margin boost: Jefferies picks 3 bank stocks to gain the most from RBI rate hikes

What happened: Jefferies raised its RBI rate-hike expectation to 75-100 basis points from 50 basis points and named bank stocks it sees gaining most, including ICICI Bank, Axis Bank and SBI. Key numbers: Rate-hike expectation raised to 75-100 bps from 50 bps. Earnings sensitivity: PNB 6%, SBI 4%, Axis 3%. Why it matters: Jefferies says rate hikes can become a positive catalyst for large private banks, PSU banks and housing finance companies, while posing a mild risk to smaller private banks, NBFCs and life insurers. It sees banks as a better bet than NBFCs.

Jefferies raised its RBI rate-hike expectation to 75-100 basis points from 50 basis points and named bank stocks it sees gaining most, including ICICI Bank, Axis Bank and SBI.

Jefferies says rate hikes can become a positive catalyst for large private banks, PSU banks and housing finance companies, while posing a mild risk to smaller private banks, NBFCs and life insurers. It sees banks as a better bet than NBFCs.