Stocks to buy: HDFC Bank, SBI, Bajaj Finance among top stock picks by D-Street experts after RBI's bold 50 bps rate cut

The Reserve Bank of India (RBI) on Friday, June 6, announced bold decisions in its second bi-monthly monetary policy of the current fiscal (FY26). RBI Governor Sanjay Malhotra-led Monetary Policy Committee (MPC) decided to cut the repo rate by a supersized 50 basis points (bps) to 5.50 per cent from 6.00 per cent earlier. This is the central bank’s third straight repo rate cut.

While it lowered the repo rate by 50 basis points (bps), the third cut in a row, front-loading them on the back of softening inflation, it also went for a 100 bps cut in the cash reserve ratio (CRR). RBI Governor Sanjay Malhotra also announced in his monetary policy speech that the rate-setting panel has decided to change the policy stance to ‘Neutral’ from ‘Accommodative’.

RBI June MPC Meeting: Impact on sectors

With the latest decisions, D-Street experts believe the RBI’s shift in policy stance from 'accommodative' to 'neutral' suggests a more balanced and cautious approach this year, supporting growth while keeping inflation risks in check.

“A CRR cut of 100 bps in four tranches, effective from September 2025, should provide a further liquidity boost. This will support credit growth for banks, especially during H2FY26, characterised by the festive season. The CRR cut would release primary liquidity of about ₹2.5 lakh crore to the banking system by December 2025. We view this as a positive development for banks,” said domestic brokerage Axis Securities.

According to Suresh Darak, Founder of Bondbazaar, sectors such as real estate, automobiles, and MSMEs, which are particularly sensitive to interest rate movements, stand to benefit significantly from the RBI's latest move.

Experts say softening inflation trends, which are expected to remain within or below the tolerance limit, and a likely demand recovery can be viewed as positive. The RBI has also revised its inflation forecast for FY26 downwards to 3.7 per cent versus four per cent earlier, while maintaining its annual GDP growth forecast at 6.5 per cent.

Stocks to buy after RBI MPC Meeting

At present, domestic brokerages, including Axis Securities, prefer banking stocks with promising growth prospects, healthy deposit franchises, stable asset quality metrics, and strong and steady management teams.

“From a banking sector perspective, the pick-up in credit growth, which has been subdued as banks exit FY25, remains pivotal. Hopes are pinned on a possible recovery in H2FY26 supported by falling interest rates, expectations of a strong monsoon, consumption boost from the tax rate cut and potential recovery in demand for the unsecured segments as stress subsides,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

"Asset quality concern appears to be waning with unsecured segment stress showing gradual signs of stability, while the secured segment asset quality continues to hold up well. We continue to prefer the larger private banks and our picks would be HDFC Bank, ICICI Bank and Kotak Bank amongst the larger private banks and City Union Bank amongst the mid-sized banks," added Kulkarni.

Here are the top stock picks:

Market experts said RBI's measures are expected to benefit key liquidity-sensitive sectors. NBFCs and banks, both PSU and private, stand to gain first. Broader consumption-linked sectors like consumer durables, discretionary, autos, e-commerce, aviation, hospitality, and real estate are also poised to perform well due to increased credit availability and consumption demand.

“Given the high valuation environment, a selective approach is advised — focusing on sector leaders such as ICICI Bank, HDFC Bank, Bajaj Finance, Voltas, M&M, InterGlobe Aviation, Indian Hotels, and premium retail brands,” said Vinayak Magotra, Founding Team, Centricity WealthTech.

Ashok Chandra, Managing Director and CEO of Punjab National Bank (PNB) claimed that the state-run bank sees the CRR cut as an opportunity to step up credit deployment, especially towards productive sectors and retail demand, while continuing to support MSMEs, retail, agri, and other priority segments.
 

Axis Securities has picked the following stocks to buy after RBI's policy move:

Private Banks – HDFC Bank, Kotak Mahindra Bank, ICICI Bank, City Union Bank, AU Small Finance Bank, and Ujjivan Small Finance Bank

PSU Banks – SBI, Bank of Baroda, and Canara Bank

NBFCs – Shriram Finance, Cholamandalam Inv & Finance, Bajaj Finance and SBI Cards.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.