The bank continues to remain in a strong execution phase, with no visible structural concerns in the franchise. For the March quarter, net interest income (NII) is expected to grow around 7% year-on-year, while pre-provision operating profit (PPOP) and profit after tax (PAT) are both likely to rise about 3% year-on-year, indicating steady earnings momentum.
Margins are expected to remain broadly range-bound, with net interest margin (NIM) seen at around 4.3% in FY26. Over the medium term, margins could gradually improve to 4.4%–4.5% over the next two years, supported by a favourable mix and stable funding costs.
Asset quality is likely to remain best-in-class, with gross non-performing assets (GNPA) estimated at around 1.4% and net non-performing assets (NNPA) at about 0.3%. Credit costs are expected to stay contained in the range of 45–50 basis points, reflecting continued balance sheet strength.
On the growth front, loan growth is expected to be around 16% year-on-year, while deposits are likely to grow at approximately 15% in FY26, indicating a broadly balanced expansion trajectory.
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However, the key near-term overhang remains the potential for additional provisioning linked to the Reserve Bank of India’s priority sector lending (PSL) review. This is largely seen as a compliance-related adjustment rather than a reflection of underlying stress in the loan book.
The Mumbai-headquartered lender currently has a market capitalisation of ₹9.59 lakh crore and has delivered negative returns of around 6% over the past six months.
