NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Anand Rathi Report
In this report, domestic brokerage firm highlighed that banking sector continues to show healthy trends with accelerating credit growth, stable asset quality and return ratios. System credit growth continued its ninth consecutive month of acceleration with 17.7% growth in May-26, with the PSBs outpacing private banks for the seventh straight quarter.
While deposit growth is accelerating, new foreign currency non-resident deposit rules should further boost it by 150-200bps.
Though net interest margin fell in Q4 FY26, chances of a rate hike in CY26 signals stable to improving NIM in FY27e. Asset quality improved in Q4 FY26 both on YoY and QoQ basis.
The brokerage also flagged that slippages can rise due El Nino, crude prices, sluggish job growth etc. but the banks' balance is resilient to absorb any asset quality shock given high provisioning cover (>80%) and capital ratios.
Anand Rathi expects 14-15% growth/RoE trend to continue for the sector.
Notably, valuations appear to be reasonable given these trends, believes the brokerage.
Top Picks: SBI, BoB, UBI, Indian Bank, Axis Bank, ICICI Bank, Federal Bank, DCB and J&K Bank.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
