Archive · 2 Oct 2025
MOFSL: Banking Sector NIMs to Bottom in Q2, Recovery Predicted
MOFSL believes that the banking sector's profits (NIMs) will likely hit the lowest point in the September quarter.
They expect these profits to gradually improve in the second half of the year because of changes in deposit rates and a reduction in how much money banks must keep with the central bank (CRR).
Loan growth remains slow.
Banks like Bandhan Bank, Equitas SFB, AU SFB, and Axis Bank might see their profits shrink the most, while RBL Bank could see a slight improvement.
The company anticipates challenges in certain loan areas but expects earnings to improve from the second half of FY26.
MOFSL expects banking sector net interest margins (NIMs) to bottom out in Q2FY26.
Credit growth is modest, at 10.3% year-on-year as of September 5, 2025.
Most banks are projected to see NIM contraction in Q2 before recovering in later quarters.
Bandhan Bank, Equitas SFB, AU SFB, and Axis Bank may see sharper NIM declines.
SBI Cards' PAT is expected to rise 49.5% YoY, and Paytm is projected to report a profit.
- Who
- Motilal Oswal Financial Services (MOFSL)
- What
- Q2 outlook for the banking sector
- When
- Q2FY26 (September quarter)
- Where
- India
- Why
- Impact of deposit repricing and CRR cut
- Brokerage Firm
- Motilal Oswal Financial Services (MOFSL)
- Focus Quarter
- Q2FY26 (September Quarter)
- Banking Sector Outlook
- NIMs expected to contract; bottoming out in Q2
- Credit Growth
- Modest, 10.3% YoY as of Sept. 5, 2025
- NIM Decline Forecast
- Sharper for Bandhan, Equitas, AU, and Axis Banks
- PAT Decline Estimate
- 7.2% YoY in Q2; Earnings recovery from H2FY26
- SBI Cards PAT Forecast
- Up 49.5% YoY to Rs 600 crore
Sources
Infosys, TCS, Coforge, Hexaware, KPIT, Wipro, Tata Tech, Mphasis: Q2 preview, stock picks
KPIT Tech may see revenue decline in Q2, Goldman Sachs says; JPMorgan sees 'washout' FY26
DLF, Lodha, Oberoi Realty, Prestige Estates, ABREL, Sobha: Q2 pre sales preview
Equities May See Turnaround: Motilal Oswal
Earnings Preview: Muted Q2FY26 ahead for IT companies; mid-caps seen outperforming large-caps: Motilal Oswal
Auto stocks in focus: Motilal Oswal’s top Buy, Sell and what to watch this festive season
Coforge, Persistent, Mphasis, Hexaware, Infosys, TCS: IT picks as ahead of Q2 results