Banks Under Pressure After Q1; NBFCs Surprise With Strong Earnings Amid Market Caution

Banking stocks remain under pressure as investors turn cautious after the latest earnings season. While large private sector banks largely reported expected results, Axis Bank disappointed, HDFC Bank's numbers remained soft, and ICICI Bank stood out with a stronger-than-expected performance. Mayuresh Joshi, Head Equity Research, William O Neil India say concerns now revolve around sustaining deposit growth, managing credit-deposit ratios, and the quality of unsecured lending amid an uncertain macro environment. In contrast, several mid-sized private banks have delivered relatively better performances. The biggest positive surprise, however, has come from NBFCs, with many reporting stronger-than-expected earnings despite a challenging environment. In this conversation, market expert Mayuresh Joshi explains why investors are cautious on banks, what is driving the divergence within the BFSI sector, and why NBFCs are emerging as the brighter spot.