INDIA FIRST TO MARKET

Research evidence excerpt

INDIA FIRST TO MARKET

Asia Pacific Equity Research

India First to Market 02 July 2026

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India Equity Strategy (Rajiv Batra/Rushit Mehta)

June 2026 wrap: Ending a six-month underperformance streak

MSCI India ($ index) rose by 1.2% in June, outperforming MSCI APxJ/EM indices by 2.9% each. Performance was driven

by an oil collapse (Brent -42% from its April peak to ~$73), RBI’s measures to attract dollars (such as the removal of interest

rate ceilings on FCNR deposits for 3-5 year tenors), government’s removal of LTCG/withholding taxes on FPIs for eligible

government securities, alongside a resilient INR (even as DXY rose 2.3%); the drags were IT sell-off (-11.2%), a firmer dollar

(DXY 101.2), rising US yields and the weakest June monsoon in a decade (39.8% below LPA). Large caps rose by 0.7%,

underperforming small and mid caps by 3.6%/0.5%, respectively. Nifty 50 rose by 1.4% and ended June at 23,866.

India Financials (Anuj Singla)

1QFY27 Preview: Growth and NIMs in focus with AQ benign; NBFCs positioned for a strong quarter

We highlight the key trends that we forecast for Indian Financials in 1Q’FY27: (i) Benign Asset Quality (AQ) trends (adjusted for

seasonality) with no visible impact of the Middle-East conflict related disruptions; (ii) loan growth acceleration in line with the

system loan growth (17.7% in May’26) with strong AQ providing a conducive environment; and (iii) NIM pressure for most

reflecting elevated wholesale funding costs in the early part of 1Q, with risk to loan yields for select players from higher

wholesale growth. With AQ trends benign this quarter, we believe that growth and NIMs will be the key focus areas for

investors. In this context, we expect a strong quarter for Indian NBFCs (BAF, CIFC, LTFH) and select mid-tier banks (AUBANK)