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Informist, Friday, Aug. 1, 2025

MUMBAI – The pressure on banking stocks is likely to continue into next week as earnings from various banks hint at falling margins as transmission of the Reserve Bank of India's policy rate cut takes effect, analysts said. With only two banks out of the constituents of the Nifty Bank index yet to declare earnings, analysts see the fall in margins as an industry-wide trend which may lead to lower profitability going ahead.

"The market focused on earnings and management commentary during the Apr-Jun earnings season. While aggregate earnings were broadly in line with estimates, the outlook remained muted, resulting in continued cuts in earnings estimates," Shrikant Chouhan, head of equity research at Kotak Securities, said. 

State Bank of India, the largest bank in the country, is expected to declare its earnings on Aug. 8, with brokerages expecting the bank to report a net profit of INR 171.46 billion, flat from a year ago and down 8% from the previous quarter. The Federal Bank, which will declare its earnings for the quarter on Saturday, is expected to report an 8% on-year fall in its bottom line to INR 9.26 billion due to slower loan growth and margin compression. 

"Almost all banks' margins were either flattish or had to take a hit because of the rate cuts, so the bottom line may have an impact going ahead. However, the easy-flowing liquidity may come in as a saviour," an analyst with a large brokerage firm said. 

The Nifty Bank index closed 0.6% lower on Friday at 55617.60, with all its constituents barring Kotak Mahindra Bank ending in the red. Federal Bank led the losses ahead of its quarterly earnings on Saturday. During the week, Nifty Bank underperformed the Nifty 50, declining 1.6% compared with a 1.1% fall in the benchmark index.

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* Earnings Outlook: IDFC FIRST Bk's PAT seen down on year for 7th straight qtr

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:

End

US$1 = INR 87.54

Reported by Kabir Sharma

Edited by

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