Banks Q2 Results Preview - Growth Modest; Asset Quality Trend To Be Divergent: Motilal Oswal

Credit quality in this cycle has been robust for most banks, leading to controlled provisioning expenses and thus a healthy RoA, says the brokerage.

Close view of a person counting Indian currency 500 rupee notes (Photo: Radhakisan Raswe/ Source: NDTV Profit).

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Motilal Oswal Report

We estimate net interest income for our banking coverage universe to grow ~8.6% YoY in Q2 FY25, while controlled opex to result in pre-provision operating profit of 13.2% YoY/ 0.9% QoQ. For Q2 FY25, we thus estimate private/public sector banks to report earnings growth of 4.1%/17.2% YoY.

We also estimate the earnings of our banking universe to grow 10.1%/13.2%/13.9% YoY over Q2 FY25/FY25/FY26.

Hence, we estimate the banking sector’s earnings to post a 13.6% compound annual growth rate over FY24-26.

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Motilal Oswal Financials Banks Q2FY24 Results Preview.pdf
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Also Read: IT Sector Q2 Results Preview - Recovery In Progress: HDFC Securities

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