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

In a decisive move to stimulate economic growth, the Reserve Bank of India (RBI) surprised markets by slashing the repo rate by 50 basis points (bps) during its latest monetary policy review. This unexpected yet welcome rate cut — the biggest since the pandemic years — has sent ripples of optimism across Dalal Street. Banking and financial stocks were among the top gainers following the announcement, as experts rolled out a fresh list of top stock picks that are likely to benefit in a low-interest-rate regime.

Among the top recommendations from equity strategists are HDFC Bank, State Bank of India (SBI), and Bajaj Finance, each poised to ride the wave of improved credit demand and easing borrowing costs.

RBI Surprises With Aggressive Rate Cut

On Thursday, RBI Governor Shaktikanta Das announced a 50 basis points cut, bringing the repo rate down to 5.75%, citing slowing core inflation, a need to boost private investment, and the central bank’s commitment to support India's economic rebound.

"With inflation largely within the tolerance band and growth needing a push, this bold step was necessary," said Radhika Rao, Senior Economist at DBS Bank. "The central bank is front-loading its support in anticipation of improved consumption and credit growth."

This marks the third consecutive cut in 2025, and economists now forecast a lower-for-longer rate trajectory, making financial and consumer-facing sectors particularly attractive.

Market Reaction: Banks, NBFCs Rally

Following the announcement, benchmark indices Sensex and Nifty surged, with banking, financial services, and real estate stocks leading the charge. The Bank Nifty rallied over 2.5%, underlining investor confidence in rate-sensitive sectors.

"Lower interest rates directly reduce the cost of borrowing for both consumers and businesses, which bodes well for banks and NBFCs that thrive on credit growth," said Amit Jeswani, CIO at Stallion Asset.

Top Stock Picks by Experts

🏦 HDFC Bank

CMP: ₹1,680 | Target: ₹1,850 | Upside: ~10%
India’s largest private-sector lender is considered a top beneficiary of the rate cut. Analysts point to its robust loan book, strong CASA ratio, and resilient net interest margins.

"With the retail lending cycle expected to revive, HDFC Bank is well-positioned to gain market share," said Siddharth Bhamre, Head of Research at InCred Equities.

🏦 State Bank of India (SBI)

CMP: ₹900 | Target: ₹1,020 | Upside: ~13%
India’s largest bank by assets is expected to benefit from increased corporate credit demand and improved treasury income.

"SBI’s digital transformation, improving asset quality, and rural lending penetration make it a compelling bet in this environment," noted Meenakshi Jha, Banking Analyst at Motilal Oswal.

💰 Bajaj Finance

CMP: ₹7,200 | Target: ₹8,000 | Upside: ~11%
The rate cut comes as a boon for non-banking financial companies (NBFCs) like Bajaj Finance, which rely heavily on market borrowings. The lower cost of capital enhances their margin profiles.

"Consumer financing, which had slowed, is set to pick up. Bajaj’s strong brand recall and underwriting capabilities make it a leader in this space," commented Karan Shah, VP-Research, Sharekhan.

Other Beneficiaries in Focus

• LIC Housing Finance: With home loan EMIs set to drop, housing financiers are expected to see a spike in demand.

• HDFC Ltd (now merged with HDFC Bank): Gains from real estate rebound and synergy benefits.

• ICICI Bank: Analysts remain bullish given its diversified portfolio and rising market share in retail credit.

Broader Economic Implications

Economists believe the RBI’s move will further push banks to pass on the benefits to end-users. A spike in demand for home loans, vehicle loans, and SME loans is expected to stimulate sectors like automobiles, real estate, and construction.

"The monetary policy is aligned with fiscal efforts to revive capex. The rate cut is likely to have a multiplier effect across the consumption and investment cycle," said Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet.

Investor Outlook: Time to Stay Bullish

With liquidity expected to remain ample and bond yields softening, equity markets may remain buoyant in the near term. Retail and institutional investors are advised to focus on quality stocks with strong balance sheets, pricing power, and consistent growth visibility.

"Investors should use corrections as buying opportunities. This policy stance boosts risk appetite and supports equities, especially banks, NBFCs, and infra-linked plays," said Neha Doshi, Fund Manager at Tata Mutual Fund.

However, experts also caution that geopolitical tensions or a resurgence in inflation could prompt the RBI to revisit its dovish stance later in the year.

The RBI’s surprise 50 bps rate cut has shifted market sentiment firmly into bullish territory. As borrowing costs drop, the stage is set for a pickup in credit demand, infrastructure spending, and retail consumption. Investors looking for value amid macro optimism may find HDFC Bank, SBI, and Bajaj Finance to be solid picks in the post-policy rally.