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Informist, Friday, Oct. 10, 2025

MUMBAI - The September quarter earnings of banks are likely to provide cues to investors in the near term, though no major rise in stock prices is expected. This is because of the rising gap between loans and deposits, pressure on net interest margins, and likely muted earnings growth in the quarter, analysts covering the sector said.

"There isn't enough demand. GST cuts and rate cuts are not material events; they are not going to move the needle for the sector," an analyst at a top domestic broking firm said. Corporate entities don't want to borrow as they have enough internal accruals, the analyst said. There will be slow pick up in the private sector's capital expenditure, he added.

For the September quarter, the aggregate net profit of 16 banks which are part of the Nifty 200 index is expected to fall 5% on year to INR 782.44 billion and revenue is expected to grow a mere 1% to INR 1.80 trillion, according to estimates from seven broking firms. From the quarter-ago period, this would translate to a 3% fall in the bottom line while the top line will be unchanged. Estimates for two banks--Bank of India and Bank of Maharashtra--were not available with Informist.

Last week, data showed that the gap between banks' loans and deposits widened in the fortnight ended Sept. 19. Bank loans rose by INR 1.02 trillion during the fortnight, while deposits fell by INR 1.23 trillion, as per the Reserve Bank of India's data. This was due to the soft growth in corporate loans and slowdown or deferment of investment plans by corporate on uncertainties caused by US trade and tariff policies, analysts said.

This week, the Nifty Bank index rose almost 2%, in line with the rise in benchmark equity indices Nifty 50 and BSE Sensex. Financial services stocks have the highest weightage in the Nifty 50, accounting for more than 36% of the index. On Friday, the bank index extended its winning run for the second consecutive week and closed 0.7% higher at 56609.75 points, with all 12 constituents closing higher. The near-term support for the index is pegged at 56200-55800 points and resistance at 56200-55800 points, according to a senior technical and derivatives analyst at domestic broking firm.

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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony

Edited by Ashish Shirke

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