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BFSI's double-digit Q2FY25 earnings growth versus Nifty's 4% year-on-year net profit uptick makes it a preferred D-Street sectoral bet for brokerages and analysts who remain bullish on large banks and NBFCs.Having underperformed the broader Nifty since July, experts see the rally to begin once the Reserve Bank of India (RBI) starts cutting interest rates. But the Q2 performance provides a much-needed tailwind, they opine. Banks’ profits remain strong despite moderation while net interest margins (NIMs) seem to be stabilising on a sequential basis though they are still down on a YoY basis, Nuvama said, adding that benign credit costs also augurs well for the sector. "The earnings growth was driven by BFSI (+15% YoY) with PSU Banks (+34% YoY against expected 17% growth) and NBFC non-lending (+92% YoY versus expectations of 85% growth) leading from the front," a Motilal Oswal note said.Calling Q2 a decent quarter for banks with a few exceptions, Kranthi Bathini, Director-Equity Strategy at WealthMills Securities said that large banks should be a long term bet for investors as they would be instrumental in taking the Indian economy forward. Between NBFCs and banks, he prefers the latter, saying that regulator hurdles and liquidity issues are expected to weigh on the former.The next trigger could be a rate cut by the Reserve Bank of India (RBI) which is desired by the sector but is not likely to manifest in the near term. Large banks are more equipped to handle liquidity issues, he opined. Expert Nilesh Jain, who is Head (VP), Equity Research Technical and Derivatives at Centrum Broking is also bullish on financials, especially NBFCs and private sector banks.Banks' Q2, returns report cardETMarkets analysis finds 25 banks out of 41, posting a net profit growth in double digits while Yes Bank delivered a 145% YoY surge. In the remaining 15, six posted single-digit growth of up to 8.4% while 9 witnessed a decline.The laggards are IndusInd Bank, IDFC First Bank, RBL Bank, Equitas Small Finance Bank, ESAF Small Finance Bank, Jana Small Finance Bank, Ujjivan Small Finance Bank and Utkarsh Small Finance Bank which have seen their profit after tax (PAT) go down between 21% and 236% with ESAF SFB being the worst performer.Net interest income (NII) growth for 19 banks were in double-digits led by AU Small Finance Bank (58%). It was followed by Suryoday Small Finance Bank (35%) and Punjab & Sind Bank (PSB, 29%). Dhanlaxmi Bank (-0.11%), Union Bank Of India (-0.86%) and ESAF Small Finance Bank (-9.42%) reported decline in their NII in the July-September quarter.Bank stocks have faced investors' wrath in the face of correction in the overall markets. The average returns by these 41 banks since July are at negative 15% versus Nifty's decline of 2.3% in the same period. Only 6 stocks managed to remain positive with Fino Payments Bank (15%) as the top performer. HDFC Bank, ICICI Bank, City Union Bank, Karur Vysya Bank and Federal Bank yielding between 0.6% and 11%. NBFCs Q2, returns report cardOut of 21 NBFCs analysed, 13 reported a double digit growth in their Q2 PAT with the best showing by SBFC Finance (60%) followed by Bajaj Holdings & Investment (52%) and Edelweiss Financial Services (44%). Jio Financial Services (3%) and Manappuram Finance (2%) delivered single-digit earnings uptick.The remaining 6 viz. Bengal & Assam Company (-60%), CreditAccess Grameen (-46%), Piramal Enterprises (-672%), Poonawalla Fincorp (-155%), SBI Cards And Payment Services (-33%) and Tata Investment Corporation (-10) reported PAT declines in the said quarter.As for the revenue growth, the top performer was Bengal & Assam Company (109%) while 19 others posting double-digit growth. SBI Cards And Payment Services posted a 10% YoY revenue growth. Average returns by these stocks since July stood at negative 4% as on November 14. In this, only 6 stocks have seen their share price grow since July. Edelweiss Financial Services (60%) tops the chart followed by Bajaj Holdings & Investment (27%), Piramal Enterprises (13%) and Bengal & Assam Company (12%). SBFC Finance (0.7%) and Tata Investment Corporation (2%) managed to remain afloat.Ten stocks saw their share price erode in double digits with CreditAccess Grameen as the worst loser at 33%. It is followed by Manappuram Finance (-25%) and L&T Finance (-24.05%).Stocks to buyNuvama remains overweight on banks and has picked ICICI Bank, HDFC Bank, State Bank of India (SBI). While it sees Q2FY25 earning "soft and mixed" for most lenders, a sharper slowdown in unsecured loans is positive from a capital conservation and risk perspective, it opined. The brokerage alo highlighted superior performance by state lenders versus their private peers.IndusInd Bank, SBI Card and AU SFB are a no go area for Nuvama.Top buys of Motilal Oswal are HDFC Bank, ICICI Bank, AU SFB, IndusInd Bank, SBI, Bank of Baroda (BoB), Canara Bank and Union Bank. In NBFCs, Aditya Birla Capital, Bajaj Finance, Cholamandalam Investment & Finance, Five-Star Business Finance, Home First Finance, IIFL Finance and L&T Finance. Bathini of WealthMills picks ICICI Bank, HDFC Bank, Axis Bank, Bajaj Finance and Piramal Enterprises as his top buys with 15-20% upside over the next 12 months. Jain's preferred picks are ICICI Bank, Axis Bank and Kotak Mahindra Bank along with SBI which he said should be accumulated at current level.Within NBFC space, counters like Chola Finance which have fallen the most and he is expecting a strong rebound in it. Shriram Finance and Piramal Enterprise are other notable selections.Angel One, ICICI Pru Life, ICICI Lombard and Life Insurance Corporation (LIC), SBI Life Insurance and Star Health Insurance are other BFSI counters with a buy view by Motilal Oswal.(Data Inputs by Ritesh Presswala)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Shares of Suzlon Energy hit a 5% upper circuit at Rs 62.37 in Tuesday's trade after global brokerage firm Morgan Stanley upgraded the stock to 'Overweight' from 'Equal-weight'.While upgrading, Morgan Stanley revised its target price for Suzlon to Rs 71 from Rs 78, citing the recent steep correction in the stock price as a buying opportunity.The brokerage continues to view Suzlon as a key beneficiary of India's energy transition, supported by a strong business moat and a large 5.1GW order backlog to be executed over the next 24 months. The company has been selective in taking on orders with higher visibility in offtake. With reduced competitive intensity, Morgan Stanley expects Suzlon's market share to rise to 35-40% by FY27.The firm also estimates that India's wind additions will drive 32GW ($31 billion) of orders for wind OEMs from FY25-30.Also Read: NTPC Green Energy IPO: Catch all the live updates hereIn Q2 FY25, Suzlon Energy reported a 96% jump in its consolidated net profit at Rs 201 crore versus Rs 102 crore in the year ago period. The company's revenue from operations during the quarter stood at Rs 2,093 crore, up 48% over Rs 1,417 crore reported in the corresponding quarter of the previous financial year.Company's Earnings, Before Interest, Taxes, Depreciation and Amortisation (EBITDA) in the reported quarter stood at Rs 294 crore versus Rs 225 crore in the year ago period. It was 31% higher on a YoY basis. Meanwhile, EBITDA margin in Q2FY25 was down to 14.1% from 15.9% in the year ago period.At 10:23 am, Suzlon's shares were trading 4.9% higher at Rs 62.3 on the BSE. On a year-to-date basis, the stock has gained 62%, and it has surged 670% over the past two years, delivering multibagger returns. The company currently has a market capitalization of Rs 85,111 crore.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)