Jefferies has identified HDFC Bank, Bandhan Bank, and AU Small Finance Bank as top picks in India's banking sector, anticipating up to 38% upside potential by 2026. The firm notes a significant pickup in credit growth across the sector, driven by a strong festive season and improved microfinance collections. Jefferies highlights HDFC Bank's strategic transition and AUM expansion, while also acknowledging its reliance on non-retail funding. Bandhan Bank also receives a 'buy' rating, with further details on AU Small Finance Bank's outlook expected.