Indian banks are expected to grow their net interest income (NII) by about 5% year‑on‑year and boost profit after tax by roughly 4% in the December quarter. This outlook is keeping the Bank Nifty index near the 59,300 level.
Citi's Forecast for Indian Banks
Citi predicts that credit growth will slow to 3‑5% quarter‑on‑quarter. Net interest margins (NIMs) are expected to diverge across banks:
- Margins could expand for AU Small Finance Bank, HDFC Bank, Kotak Mahindra Bank, RBL Bank and SBM Bank.
- Margins are likely to stay flat for ICICI Bank and IDFC First Bank.
- Margins may dip slightly for Axis Bank and Yes Bank.
Citi also placed a 90‑day positive catalyst watch on HDFC Bank and Kotak Mahindra Bank, while moving Federal Bank to a neutral rating after its recent rally.
Technical View on Bank Nifty
Axis Securities says the next decisive level for Bank Nifty is 59,306. If the index stays above this, it could climb to 59,396, 59,492 and even 59,581.
Falling below 59,306 may trigger profit‑taking, pushing the index down to 59,210, 59,121 or 59,024.
PL Capital notes that strong support sits near 58,700. For a clear upward move, the index needs to break above 59,800, which could open targets around 61,300 and 62,700.
Current Market Snapshot
At midday, Bank Nifty was almost flat, up 0.03% to 59,318.25. The following banks showed modest gains:
- Axis Bank
- Kotak Mahindra Bank
- Punjab National Bank (PNB)
- HDFC Bank
- State Bank of India (SBI)
These stocks were in the green, while these banks slipped slightly:
- Canara Bank
- AU Small Finance Bank
- ICICI Bank
- IndusInd Bank
- IDFC First Bank
- Bank of Baroda
- Federal Bank
What This Means for Investors
The modest growth expectations and mixed margin outlook suggest that some banks may outperform while others could face pressure. Keep an eye on the key support (around 58,700) and resistance (near 59,800) levels to gauge short‑term direction.
Disclaimer
Remember, this is my perspective, not a prediction. Always do your own research and consider your risk tolerance before making any investment decisions.