India Financials: Metrics that matter

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India Financials: Metrics that matter

8 July 2026

India Financials

India’s banking sector enters the 1QFY27 earnings season with macro concerns still Pranav Gundlapalle

+91 226 842 1407 dominating sentiment, even as operating fundamentals remain resilient. Recent trends

pranav.gundlapalle@bernsteinsg.com suggest growth, margins and asset quality are holding up better than feared, shifting the

focus toward company-specific execution and the sustainability of earnings momentum. In

Ishan Mittal this report, we highlight the key sector debates and stock-specific metrics that we believe

+91 226 842 1442

ishan.mittal@bernsteinsg.com matter for the long-term thesis and the relative stock performance over the coming quarters.

Anirudh Gupta Macro risks easing at the margin: India's economy remains resilient, with 7.7% real GDP

+91 226 842 1456 growth in FY26, inflation remaining in line with RBI's 4% target, and fiscal trends in line

anirudh.gupta@bernsteinsg.com with historical norms. While trade deficits, FII outflows and geopolitical uncertainty created

near-term pressures, RBI measures and the recent West Asia ceasefire have improved the

external outlook, with a >100bps decline in CD rates helping ease funding costs.

Banking fundamentals remain resilient despite macro uncertainty: System credit

growth remains strong at ~18% YoY, supported by broad-based momentum across

industrial, services and secured retail lending. Margin and asset-quality concerns also

appear contained, with improving funding conditions, widening loan–deposit spreads and

benign credit trends supporting profitability.

Metrics that matter:

-At a sector level, margin pressures remain a key monitorable, but widening loan-deposit