Core Insights - ICICI Bank's implied upside as of October 3 was 23.2%, ranking third among the 20 largest banks in the Asia-Pacific region by market capitalization [1][6] - The Indian banking sector has benefited from government reforms aimed at stimulating economic growth, including simplified goods and services tax rules and reduced levies on goods [2][6] - The Reserve Bank of India (RBI) maintained its benchmark repurchase rate at 5.5% on October 1, citing a favorable inflation outlook, and revised its GDP growth target for the fiscal year ending March 31, 2026, to 6.8% from 6.5% [2][6] Industry Outlook - The outlook for Indian banks is expected to improve in the fiscal year beginning April 1, 2026, as net interest margins (NIMs) stabilize, enhancing profitability [5][6] - Investors are looking for a rebound in domestic consumption to improve returns, which have been stagnant due to geopolitical tensions, particularly a trade standoff with the US [5][6] - Total returns for most large Indian banks in the first nine months of 2025 were below the strong performance seen in 2024, reflecting cautious investor sentiment amid ongoing geopolitical issues [5][6]
Indian banking outlook to improve next fiscal as margin declines halt says S&P arm
The Economic Times·2025-10-28 09:04