Bank Stocks Outlook
Seen weak on IndusInd Bank fiasco, macro factors
This story was originally published at 20:06 IST on 13 March 2025
Register to read our real-time news.Informist, Thursday, Mar. 13, 2025
MUMBAI – The sentiments on banking stocks are likely to be weak in the near term on account of various factors, including the IndusInd Bank fiasco this week, which dragged Nifty Bank down around 1%, analysts said. IndusInd Bank on Monday said that an internal review had noticed discrepancies in the accounts of its derivative portfolio, after which its shares slumped 27% on Tuesday and wiped out around INR 190 billion of market capitalisation.
On Friday, Nifty Bank closed flat at 48,060.40 points. "For the Bank Nifty, a double bottom support is placed at 47700. As long as it is trading above this level, a pullback formation is likely to continue. On the higher side, it could move up to the 20-day simple moving average, or 48600 and 48800. However, if it falls below 47700, the sentiment could change, increasing the likelihood of hitting 47300-47000," Amol Athawale, technical analyst at Kotak Securities, said in a note.
After the IndusInd Bank announcement, the Reserve Bank of India asked all banks with large forex derivatives books to provide details on their exposures, media reports said. This will give clarity if the accounting mismatch is a system-wide issue or a one-off incident, analysts said.
The asset quality of banks is still under pressure, which will weigh on the sector's performance, Moody's Ratings said in a report this week. "The asset quality of Indian banks may deteriorate moderately due to stress in unsecured retail loans, microfinance loans, and small business loans. The ratio of non-performing loans across the banking system is seen at 2-3% in the next 12-18 months," the rating agency said.
The system-wide gross non-performing asset ratio dropped to 2.6% as of the end of September from 7.3% at the end of March 2021 due to recoveries and write-offs of legacy problem loans, while the fresh slippage ratio remained low, Moody's said in the report. The rating agency has a stable outlook on the banking system.
In addition to grappling with asset quality stress, the expectations of a rate cut in April will hit net interest margins, putting further pressure on the lenders. However, an analyst with a private brokerage firm said the net interest margins of banks, though under pressure, will be manageable as it improves loan growth. "It will be like 10-20 bps (on net interest margin) kind of a movement on the downside also, which is manageable. But the loan growth should be supportive," the analyst said.
TOP HEADLINES
* GenAI can impact 38 mln jobs in India, bk ops productivity can rise 46%: EY
* Moody's sees India FY26 GDP growth over 6.5%; banking system outlook stable
* Karur Vysya Bank appoints Sankar Balabhadrapatruni as ED for 3 years
* PRESS: Amid IndusInd Bank fiasco, RBI asking bks about FX positions, hedges
* RBI Watch: IndusInd Bank fiasco raises questions about RBI's supervision
* PRESS: Axis Bank likely to sell stake in NBFC arm; raise up to INR 40 bln
* Karur Vysya Bank to lower base rate, BPLR by 5 bps each from Sunday
* LIC acquires 2% stake in PNB, overall stake rises to over 9%
* Canara Bank cuts MCLR on some tenures by 5-15 bps effective Wed
* ET Now: IndusInd Bank promoter asks shareholders not to panic
* Fitch affirms 'BBB-' rtg of 3 PSU banks, upgrades viability ratings to 'bb-'
* SBI to sell stressed assets worth INR 2.85 bln
* IndusInd Bank finds inconsistencies in derivative portfolio accounts
* Bank of Baroda keeps MCLR unchanged across tenures
* UCO Bank keeps MCLR unch across tenures, cuts T-bill-linked lending rates
* PSU banks' gross NPA ratio 2.85% as on Dec 31, junior finance minister says
* SBI launches 501 women customer service points, to raise number by 25% FY26
* Depositors may have to wait before govt hikes deposit insurance cap - source
* RBI OKs IndusInd Bk MD, CEO Kathpalia's reappointment till Mar 2026
* Bank of Baroda introduces savings account for women NRIs
* Axis Bank executes aircraft financing deal via GIFT City banking unit
* Indian Overseas Bank board to meet Mar 19 to mull issuing infra bonds
Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:
| Company | Price | Week-on-Week Change in % | Resistance | Support |
| AU Small Finance Bank | 502.85 | (-)7.60 | 519.50 | 492.70 |
| Axis Bank | 1010.20 | (-)2.70 | 1021.30 | 999.50 |
| Bank of Baroda | 205.52 | (-)0.20 | 210.90 | 199.60 |
| Canara Bank | 82.90 | (-)2.50 | 84.20 | 81.50 |
| Federal Bank | 176.60 | (-)2.20 | 180.50 | 174.30 |
| HDFC Bank | 1706.60 | 1.00 | 1729.90 | 1688.40 |
| ICICI Bank | 1250.05 | 2.90 | 1260.60 | 1240.00 |
| IDFC FIRST Bank | 53.48 | (-)6.70 | 55.60 | 52.20 |
| IndusInd Bank | 672.35 | (-)28.20 | 721.60 | 643.10 |
| Kotak Mahindra Bank | 1985.10 | 2.60 | 2006.50 | 1958.90 |
| Punjab National Bank | 87.20 | (-)4.40 | 88.60 | 85.60 |
| State Bank of India | 727.85 | (-)0.70 | 734.90 | 721.00 |
| Nifty Bank | 48060.40 | (-)0.90 | 48486.00 | 47793.30 |
| Nifty 50 | 22397.20 | (-)0.70 | 22624.90 | 22263.50 |
| S&P BSE Sensex | 73828.91 | (-)0.70 | 74630.70 | 73369.70 |
End
Reported by Christina Titus
Edited by Saji George Titus
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