Core Insights - The reassessment of large banks in India indicates a positive outlook driven by macroeconomic tailwinds and improving financial metrics [1][7] - Analysts expect corporate loan book growth and retail loan expansion to significantly enhance the valuation outlook for top lenders [1][7] Banking Sector Performance - HDFC Bank's net interest margin (NIM) is believed to have bottomed out, with projections of a core pre-provision operating profit (PPOP) CAGR of approximately 19% from FY26 to FY28, compared to 9% for FY26 alone [4][8] - Morgan Stanley maintains an 'Overweight' rating on ICICI Bank with a target price of Rs 1,800, citing strong deposit growth and a 3% QoQ increase in loan growth, primarily from the retail segment [5][8] - Citi has re-initiated coverage on State Bank of India (SBI) with a 'Buy' rating and a target price of Rs 1,050, based on strong credit growth visibility and operational efficiencies [5][8] Loan Growth Projections - For FY26–FY27E, Citi projects SBI's loan growth to be between 13% and 14% annually, with NIMs expected to be in the range of 2.8% to 2.9% and credit costs at 40–45 basis points [6][8] - Analysts believe that the combination of favorable macroeconomic trends and improved earnings visibility will support a constructive stance on India's leading banks [7][8]