Indian Banks Seen Gaining Q2 FY27 Earnings Momentum

Systematix Research expects Indian banks to earn more in the second quarter of FY27 than they did a year earlier.

It says banks are lending more, which can help their earnings grow.

The report also expects banks to spend about the same or less on losses from borrowers who do not repay.

But banks may make less money from each loan because their funding costs and available cash are affecting margins.

The brokerage expects average margins to fall slightly compared with the previous quarter.

Deposits have also grown, helped by strong FCNR(B) flows.

The report says loan repayment problems should remain contained.

Fee income may help, while trading gains from government securities could moderate.

Overall, the report sees lending growth supporting earnings despite pressure on margins.