2025-06-05-Jefferies-印度金融日报_2025年6月5日_13页_832kb

India Equity Research Summary

Date: June 5, 2025

Market Overview

• Nifty & Nifty Bank: Up 0.3% and 0.1% y/y respectively, reflecting steady growth.
• Sector Highlights:
  • Fintechs (PB Fintech, IIFL Capital) led the pack in intraday gains, while PSU banks and NBFCs showed moderate performance.
  • Angel One reported sequential improvement in options market share (21.4%), driven by expanding client base and order growth.

Key Economic Indicators

Liquidity

• Banking system liquidity reached ₹3tn, the highest in 3 years, supported by RBI’s liquidity injection and government spending.
• RBI likely cuts repo rates 25bps for the 3rd consecutive time due to muted inflation.

Banking Performance

• Credit Growth: YoY credit growth at 10% as of May 2025, with stable aggregates around ₹150tn.
• Deposit Growth: At 10% YoY, aggregates around ₹200tn.
• Credit/Deposit Ratio: Stable at ~80%, indicating stable lending capacity.

Valuation & Investment Outlook

Jefferies’ Ratings

• BUY Targets: IIFL Capital, PB Fintech, HDFC Bank, Axis Bank, LIC Housing, etc.
• HOLD/SELL: LICHF, SBI Cards, Muthoot Finance (due to stress in near-term quarters).

Sector Recommendations

1. Wealth Managers (360 ONE, Nuvama): Strong growth potential due to digital alliances & expanding client base.
2. Fintechs (PB Fintech, Paytm): Leverage digital transformation; growth driven by fintech platforms.
3. Insurers (HDFC Life, Max Financial): Healthy margins and affordability trends support valuation.

Upcoming Events

• RBI MPC Meeting: June 6, 2025 – Expected 25bps rate cut.
• CPI YoY: June 12, 2025 – Key inflation indicator.
• Infrastructure Data: June 20, 2025 – Industrial output, credit trends, and fiscal deficit updates.

Regulatory & Policy Updates

• LCR Norms: Potential 60 bps reduction to ease liquidity pressures.
• Deposit Rate Cuts: RBI may begin cuts, further supporting bank margins.

Market Risks

• Economic Headwinds: Inflation below forecasts may delay further policy easing.
• Sector-Specific Risks: High competition in NBFCs and insurers could impact profitability.
• Regulatory Compliance: Ongoing scrutiny on gold loan norms, deposit rates, and F&O reforms.

Concluding Thoughts

• India’s financials remain resilient despite external challenges. SMB wealth managers and fintechs offer growth opportunities, while PSU banks and insurers benefit from stable valuations.
• Macro Recommendation: Focus on sectors with pricing power (tech-driven Fintechs) and stability (PSU banks).