Jobaaj Stories
The Indian banking and financial services sector in 2025 has delivered a varied performance, with non-banking financial companies (NBFCs) and private financial institutions stealing the spotlight, while several public sector banks and select financial firms lagged behind. According to data from ACE Equity, Bajaj Finance has emerged as the standout performer in the banking and finance space, clocking an impressive 29% year-to-date (YTD) return as of April 8, 2025. This surge has propelled its market capitalization from Rs 4.23 lakh crore at the end of 2024 to Rs 5.49 lakh crore.
Other notable winners include SBI Cards with a 27% YTD gain, Aavas Financiers at 24%, and Cholamandalam Investment & Finance Company at 23%, all buoyed by strong loan growth and effective asset management. Mid-tier NBFCs like Manappuram Finance (22%) and Poonawalla Fincorp (13%) have also posted solid gains. However, the picture isn’t as rosy across the board. Punjab & Sind Bank plummeted 45%, while PSU banks such as Central Bank of India, UCO Bank, and Indian Overseas Bank saw declines exceeding 30% YTD, signaling investor wariness toward state-run lenders. Even prominent financial services players like Motilal Oswal (-38%) and JM Financial (-29%) struggled amid a subdued capital market environment.
Private banks reflected a mixed bag—Kotak Mahindra Bank gained 15%, while IndusInd Bank shed 29%, underscoring the role of stock-specific factors in driving performance.
Post-RBI Rate Cut Outlook
The Reserve Bank of India’s (RBI) recent decision to slash rates by 25 basis points and shift its stance from neutral to accommodating has injected optimism into the market. Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS, commented, “The RBI’s rate cut was in line with expectations, and its accommodating stance sets the stage for additional cuts in future meetings. With inflation trending lower, the RBI has revised its FY26 inflation forecast to 4% from 4.2%. However, global headwinds have prompted a downward tweak in GDP growth to 6.5% from 6.7%.”
Kulkarni further noted, “Rate easing cycles typically improve CASA ratios for banks. We anticipate a slower transmission on the cost of funds side compared to yields. NBFCs like Bajaj Finance, Shriram Finance, SBI Cards, and Cholamandalam Investment & Finance are poised to benefit from both the rate cuts and the RBI’s rollback of higher risk weights on bank loans to NBFCs. Among banks, we favor large private players like HDFC Bank, Kotak Mahindra Bank, and ICICI Bank.”
As the sector navigates this evolving landscape, the RBI’s policy moves could prove to be a game-changer for banking and finance stocks in the months ahead.
Disclaimer: Procapitas News provides stock market updates for informational purposes only. This should not be taken as investment advice. Readers are advised to consult a certified financial advisor before making investment decisions.
