Summary
Haitong’s latest large-cap shortlist focuses on companies it views as having robust financial profiles and sustainable growth prospects through FY26-28e. The list spans retail and corporate banking, life insurance, pharmaceuticals, and non-bank financial institutions, detailing projected return ratios, embedded value metrics and anticipated growth trajectories.
Top picks and rationale
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ICICI Bank - Placed at the top of the ranking for its return ratios, ICICI Bank is projected to deliver an average expected return on equity of approximately 16% over FY26-28e. Haitong points to a strong balance sheet and a meaningful cushion to absorb asset-quality pressures, while healthy deposit growth despite tight liquidity is expected to underpin margins going forward.
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Axis Bank - Axis Bank is noted for steady business momentum, with advances growth of 19% year-over-year in March 2026, outpacing peers. Net interest margins are anticipated to remain broadly range bound in the near term, though there is scope for some improvement driven by repricing of term deposits. The bank also carries a higher additional provision buffer of 1.3% of loans, which Haitong says places it in a stronger position relative to a couple of peers.
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LIC - The Life Insurance Corporation of India reported an embedded value of Rs7,892 billion as of March 2026, marking 2% year-over-year growth. Haitong expects an embedded value compound annual growth rate of approximately 12% during FY26-28E and projects the insurer will achieve an 8% annualized premium equivalent CAGR over the same period.
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HDFC Life - HDFC Life delivered annualized premium equivalent (APE) growth of 8% year-over-year in FY26. Haitong anticipates continued momentum with APE growing at a 16% CAGR through FY26-28E. Value of new business margins are expected to average 24.9% in FY26-28, producing a steady return on embedded value of approximately 16% and an embedded value CAGR of 16% over FY26-28E.
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SBI Life - SBI Life reported an embedded value of Rs808 billion as of March 2026, up 15% year-over-year. Haitong forecasts an embedded value CAGR of approximately 18% during FY26-28E and expects the company to achieve a 14% annualized premium equivalent CAGR over the same period.
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Dr. Reddy’s Laboratories - The company is described as transitioning away from a Revlimid-centric earnings profile toward a more diversified specialty and biosimilars portfolio. Haitong expects the ramp-up of semaglutide to offset generic Revlimid erosion and to support FY27E margins, and notes that a potential first-mover advantage in an Abatacept biosimilar strengthens medium-term visibility.
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Cholamandalam - Among vehicle financing non-banking financial companies, Cholamandalam is highlighted for diversification, with assets under management of Rs2.2 trillion as of March 2026. Haitong expects the company to deliver approximately 22% CAGR over FY26-28e while net interest margins remain range bound.
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Muthoot Finance - Muthoot is identified as the market leader in retail gold financing, having delivered industry-beating 49% growth in assets under management in FY26. Haitong projects the company will deliver a 20% CAGR over FY26-28e, while noting that similar rises in gold prices as seen in FY26 are not expected.
Key takeaways
- Haitong favors institutions with strong balance sheets and clear growth visibility across banking, insurance, pharmaceuticals and NBFCs.
- The research highlights specific return metrics and growth expectations, including ROE estimates for banks and embedded value and APE growth rates for insurers.
- Drug portfolio diversification and biosimilars play a central role in improving medium-term earnings visibility for pharmaceutical exposure.
Risks and uncertainties
- Asset quality pressures remain a concern for lenders; while some banks have provisions buffers, deterioration in asset quality could affect outcomes.
- Net interest margins for banks and NBFCs are expected to remain range bound in the near term, which could limit earnings upside from interest income.
- For pharmaceutical exposure, generic erosion of key products (such as Revlimid) necessitates successful ramps in new products and biosimilars to sustain margins and growth.
Note: The projections and metrics above reflect Haitong's expected return ratios and growth estimates for the FY26-28e period as presented in the research.