10 Best Finance Stocks to Invest in India for 2025

Key Players in the Indian Finance Sector in 2025

Considering that the nation’s economy is growing at a rapid pace, the Indian finance sector is an important industry with strong growth potential. The sector encompasses diverse institutions, from banks and non-banking financial companies (NBFCs) to housing finance companies.

If you wish to create wealth over the long term, selecting the best financial stocks is essential. This way, you can maximise your returns and simultaneously manage risks effectively. However, with so many top finance stocks in India, selecting the right companies to include in your investment portfolio can be highly challenging.

To help you create a portfolio of the best finance sector stocks in India, our research team at Samco Securities has curated a list of key players from this sector in the Indian stock market.

Top 5 Financial Stocks in India For the Long-Term

• Power Finance Corporation Ltd.

Power Finance Corporation Ltd. (PFC) is an infrastructure finance company in India that focuses on meeting the financial needs of the power sector. As one of the top financial stocks in India, the company has delivered impressive returns of 314.91% over the last 5 years as of February 3, 2025.   

In terms of financial performance, PFC is the best finance stock in India in the public sector space. The company’s low PE of just 8.15 and high dividend yield of 3.51%, indicate a reasonable valuation for investors focused on value stocks.    

• Bank Of Baroda Ltd.

A prominent public sector bank, Bank of Baroda Ltd. (BOB) is one of the top finance stocks in India. The bank has proven to be a resilient player in the finance sector with its comprehensive range of services and strong domestic and international presence. 

As of February 3, 2025, BOB’s market capitalisation stood at Rs. 107,559.16 crore. As far as valuation is concerned, the bank is highly attractive with a P/E ratio and P/B ratio of just 5.54 and 0.82, respectively. With a 5-year return of 138.79%, Bank of Baroda is a compelling choice for those looking to invest in the best finance sector stocks in India. 

• SBI Cards And Payment Services Ltd.

One of the top players in the domestic credit card market, SBI Cards And Payment Services Ltd. is the best finance stock in India. With a market capitalisation of Rs. 78,491.46 crore and a P/E ratio of 38.39 as of February 3, 2025, the company commands a premium valuation due to its position in the digital payments space. 

In terms of financial performance, SBI Cards looks attractive with EPS of 21.49 and an impressive 3-year revenue CAGR of 22.21%. Meanwhile, the company has delivered a return of 22.76% over the past five years, positioning it among the top financial stocks in India.      

• Axis Bank Ltd.

Axis Bank Ltd. is a major private sector bank in India with a high market capitalisation of Rs. 306,301.70, an attractive P/E ratio of 11.61 and a low P/B ratio of 1.79 as of February 3, 2025. The bank is among the best financial stocks in India providing diversified services through its strong digital and physical banking platforms.

Despite a modest dividend yield of 0.10%, Axis Bank’s EPS of Rs. 91.02 and a 3-year revenue CAGR of 20.53% reflect strong fundamental performance. The bank has provided a 5-year return of 38.38%, further cementing its place among the top finance stocks in India. 

• Jio Financial Services Ltd.

Having been recently demerged from Reliance Industries Ltd, Jio Financial Services Ltd. is one of the top financial stocks in India in the emerging NBFC sector. The company is aiming to transform the finance and payments sector by focusing on the untapped semi-urban and rural segments.

With an attractive CMP of Rs. 234.15 and a total market capitalisation of Rs. 1,48,762.15 crore as of February 3, 2025, Jio Financial Services could be a noteworthy consideration for investors seeking exposure to the best finance stocks in India for the long term. 

What are the Different Types of Stocks in the Finance Sector? 

The financial sector in India includes various categories of finance stocks that you can include in your portfolio. They include the following:

• Bank Stocks

Bank stocks, which are among the top finance stocks in India, include public and private sector banks that offer financial services like loans, deposits and payments. 

• Insurance Stocks

Insurance stocks belong to companies offering life, health, and general insurance products. These firms generate revenue through policy premiums and investments.

• Non-Banking Financial Companies (NBFC) Stocks

NBFCs provide loans, asset financing and other financial services but do not hold banking licenses. They serve individuals and businesses that may not have access to traditional banks.

• Housing Finance Stocks

The best housing finance stocks in India are issued by housing finance companies that specialise in providing home loans and mortgage financing to individuals and developers. 

• Asset Management Company (AMC) Stocks

AMCs manage mutual funds and investment portfolios. Given the growing interest in mutual funds, AMCs are counted among the best finance stocks in India.

• Stock Exchange and Depository Stocks

These companies operate stock exchanges and depositories. Their monopoly-like status and critical role in India's capital markets make them the top financial stocks in India.

• Payment and Fintech Stocks

With India’s shift to digital transactions, fintech companies are among the best finance sector stocks in India. They benefit from the strong growth in UPI and financial inclusion measures.

What Factors Influence the Prices of Finance Sector Stocks?

The share prices of companies in the finance sector are affected by various factors, as discussed below:

• Interest Rate Movements

Changes in the RBI’s interest rates impact borrowing and lending profitability for banks, NBFCs and housing finance companies. Lower rates boost loan demand and benefit the best financial stocks in India, while higher rates increase borrowing costs and pressure margins.

• Regulatory Policies

Government and RBI regulations on capital requirements, lending norms and compliance directly impact finance companies. Stricter rules can limit growth, while supportive policies enhance profitability for the top finance stocks in India.

• Economic Growth and Credit Demand

Stronger GDP growth fuels credit demand and drives higher revenues for banks, NBFCs and insurers. During slowdowns, loan defaults and reduced credit demand hurt profitability. This macroeconomic factor also affects the performance of the best finance sector stocks in India.

• Market Sentiment and Liquidity

Investor confidence, foreign fund inflows and overall stock market trends influence stock prices in the finance sector. Higher liquidity and positive sentiment often push valuations higher, making the top financial stocks in India attractive during bull markets.

What are the Advantages of Investing in Finance Sector Stocks?

Finance stocks in India offer a wide range of advantages. Check out the benefits of including these stocks in your portfolio. 

• Strong Economic Connection

The finance sector is directly tied to the country’s economic growth. It benefits from rising credit demand, investments and insurance penetration. Investing in the top financial stocks in India provides exposure to a sector that thrives as India’s economy expands.

• Steady Revenue Streams

Banks, NBFCs and insurance companies generate consistent income from interest, fees and premiums. This ensures steady cash flows and makes the best financial stocks in India attractive to investors seeking stability and predictable earnings.

• Dividend Potential

Many finance sector stocks, especially those issued by established banks and insurance firms, offer regular dividends due to strong profitability. This makes the best finance sector stocks in India appealing to income-focused investors looking for consistent returns.

• Long-Term Growth Potential

India’s low credit penetration, increasing financial inclusion and digital transformation create long-term opportunities for finance stocks. Investors in the best finance stock in India can benefit from sustained expansion as banking access and insurance penetration grow.

How to Evaluate Finance Stocks?

To assess the different finance companies listed on the NSE and the BSE, you must factor in these parameters:

• Net Interest Margin (NIM)

For banks and NBFCs, the NIM measures the difference between interest earned on loans and interest paid on deposits or borrowings. A higher NIM indicates better profitability. So, it is a key metric for assessing the top finance stocks in India and their ability to generate income.

• Non-Performing Assets (NPA) Ratio

The NPA ratio reflects the percentage of bad loans in a lender’s portfolio. Lower NPAs indicate better asset quality and risk management. This is why the ratio is essential for finding the best financial stocks in India, particularly among banks and NBFCs.

• Return on Equity (ROE)

The ROE measures a company's ability to generate profits relative to shareholder equity. A high and stable ROE is a sign of efficient capital use, making it an important factor in identifying the best finance sector stocks in India with strong growth potential.

• Capital Adequacy Ratio (CAR)

This ratio assesses a financial institution’s ability to absorb losses and meet obligations. A higher CAR ensures financial stability and regulatory compliance. This is why it is a critical factor for evaluating the best finance stock in India.

Conclusion: Making Informed Investment Decisions 

With Samco Securities, you can find the top finance stocks in India and invest in them easily via the Samco trading app. Use the advanced trading features in the app to analyse the stocks in your watchlist, shortlist the ones that align with your outlook and add them to your portfolio with just a few clicks. Open a demat and trading account with Samco Securities to download and access the Samco trading app today.