A clear pattern is emerging from Q4 results across banks and NBFCs, particularly among mid-sized lenders:
Credit growth of 20–25% with management guidance indicating this pace is sustainable, along with the following:-
1. Asset quality is improving, not deteriorating.
2. Credit costs are compressing.
3. NPAs remain stable or are declining.
When macro sentiment shifts and the lending cycle accelerates (potentially catalysed by a few rate cuts), these lenders are positioned for outperformance.
MSME focused lenders, MFIs, small finance banks, and select mid-sized banks potentially emerging as category leaders.
I'll cover this thesis in detail in a full length video once all Q4 FY26 results are out.
#Banks #NBFCs #MFI