..... . VALI disclosures . .....: 27/04/26, Banking Stocks in Focus

Monday, April 27, 2026

27/04/26, Banking Stocks in Focus

Axis Bank, IndusInd Bank and RBL Bank and other banking stocks are in the spotlight today following the announcement of their quarterly earnings.

Most of these banks reported mixed March quarter earnings with steady rise in net interest income (NII), while profitability has dropped or remained in low-single digit.

Axis Bank fall nearly 5% after higher provisions

Axis Bank shares declined nearly 5% in early morning trades reacting to its Q4FY26 earnings. The private lender reported flat growth in Q4 net profit to ₹7,071 crore, down 0.6% YoY, mainly due to a sharp spike in provisions and a trading loss. Total provisions and contingencies rose 159% YoY to ₹3,522 crore during the quarter.

Net interest income up 4.7% YoY to ₹14,457 crore compared to ₹13,811 crore in a year-ago period, while net interest margins (NIM) stood at 3.62%. Asset quality improved, with gross NPAs declining to 1.23% (down 17bps QoQ) and net NPAs to 0.37% (down 5bps QoQ). Slippages moderated sharply, and credit costs improved sequentially.

Axis Bank advances saw a rise of 19% YoY and 6% QoQ to ₹12.34 lakh crore, led by strong growth in corporate and SME segments. Along with the results, Axis Bank also announced final dividend of ₹1 per share for its shareholders.

IndusInd Bank turn profitable in March quarter

IndusInd Bank shares rose over 6.1% intraday to hit a day high of ₹899.9 apiece on NSE after the private lender swung back to profitability with net profit of ₹594 crore compared to loss of ₹2,236 crore in the year-ago period due to lower provisions, which fell sharply by 38.6% YoY to ₹1,484 crore during the quarter.

IndusInd Bank net interest income (NII) increased 43.4% YoY to ₹4,372 crore, driven by a low base and improved interest income dynamics. Net interest margin (NIM) improved to 3.39% from 2.25% a year-ago.

Gross non-performing assets (NPA) ratio improved to 3.43% from 3.56% in the previous quarter, while net NPA improved to 1.00%, indicating better underwriting in the microfinance segment. IndusInd Bank declared a final dividend of ₹1.50 per share, which is the first dividend in nearly two years.

RBL Bank Q4 net profit jumps 234% YoY

RBL Bank shares declined 4.7% intraday despite reporting 234% YoY jump in net profit to ₹230 crore, driven by 13% YoY drop in provisions to ₹678 crore. NII rose by 7% YoY to ₹1,671 crore, aided by strong advances growth of 23% YoY. Gross NPA improved to to 1.45% from 1.88% QoQ, while Net NPA dropped to 0.39% from 0.55% in the previous quarter.

RBL Bank net advances grew 23% YoY and 11% QoQ to ₹114,232 crore, while total deposits for the company grew 25% YoY and 16% QoQ to ₹139,018 crore. The lender also declared a dividend of ₹ 1 per share of ₹10 face value.

IDFC First Bank reports stable Q4 earnings

IDFC First Bank shares rose 3.6% intraday and hit a day high of ₹69.7 apiece on NSE after the bank reported steady growth in the March quarter. In Q4FY26, IDFC First Bank reported 4.9% YoY rise in net profit to ₹319 crore driven by growth in core business.

Net interest income (NII) surged 15.7% YoY to ₹5,677 crore, supported by 20% loan growth (reaching ₹2.90 lakh crore), while asset quality improved during the quarter as Gross NPA fell to 1.61% from 1.69% sequentially and net NPA stood at 0.48% from 0.53%. The board of directors of the bank announced a dividend of ₹0.25 per share.

DCB Bank report robust 17.4% YoY growth in NII

Another private bank, DCB Bank saw strong traction as its shares rose 6.4% intraday before witnessing profit booking. Private sector lender reported a 16% increase in net profit to ₹206 crore, driven by robust NII growth during the March quarter.

Net interest income (NII) rose 17.4% YoY to ₹655 crore. Meanwhile, Asset quality improved sequentially, with the gross NPA ratio declining to 2.45% from 2.72% in the previous quarter. Net NPA ratio also eased to 0.89% from 1.10% QoQ. DCB Bank announced final dividend of ₹1.45 per share for FY26

Report by Upstox, Source: Dailyhunt

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Monday, April 27, 2026

27/04/26, Banking Stocks in Focus

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27/04/26, Banking Stocks in Focus

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