OMKARA CAPITAL – DAILY NEWSLETTER (6th July, 2026)

Q1FY27 Pre-Quarter Business Update Tracker

Key Takeaways

The first set of Q1FY27 business updates indicates that credit demand remains resilient, with most banks and NBFCs reporting 15–30% loan/AUM growth despite a high base. The divergence continues to be on the liability side, where only a few lenders have matched loan growth with deposit mobilisation, while others continue to see slower deposit growth and moderation in CASA.

Outside financials, consumer demand has improved sequentially, supported by encouraging updates from FMCG and retail companies. Real estate continues to remain one of the strongest sectors, with developers reporting healthy volume growth along with improving realizations. Overall, the business updates so far suggest no broad-based slowdown in demand, although deposit mobilisation and funding costs remain key monitorables for the financial sector.

Outside financials, consumer demand has improved sequentially, supported by encouraging updates from Marico, Dabur and Nykaa, while real estate continues to outperform, led by Sobha's record pre-sales. Based on updates released so far, Bajaj Finance, Bajaj Housing Finance, AU Small Finance Bank, L&T Finance, CreditAccess Grameen, Sobha and J&K Bank stand out on business momentum, while RBL Bank, IndusInd Bank and Karnataka Bank remain key monitorables due to weaker liability growth. Overall, the early read from Q1FY27 does not indicate any broad-based slowdown in demand.

Overall, the early business updates indicate stable macro conditions, improving retail demand and no evidence of a broad-based slowdown, although funding costs and deposit mobilisation remain key monitorables for banks.

DETAILS

Financials: Business Momentum Improving

1. Axis Bank: Gross advances grew 18.8% YoY while deposits increased 18.2% YoY. Term deposits rose 22.8% YoY, reflecting healthy funding growth despite a modest QoQ moderation in CASA.
2. Bajaj Finance: AUM grew 23.9% YoY (+7.2% QoQ), the highest in four quarters. New loan bookings rose to 16.1 million, while customer franchise expanded 17% YoY, indicating improving business momentum.
3. Bajaj Housing Finance: AUM increased 24% YoY (+6% QoQ) to ₹1.50 lakh crore, while disbursements reached ₹19,500 crore, among the strongest growth rates in the housing finance sector.
4. AU Small Finance Bank: Advances grew 25.8% YoY while deposits increased 23.5% YoY with CASA stable at 28.8%. One of the few banks reporting balanced growth across both assets and liabilities.
5. CSB Bank: Advances grew 24% YoY and deposits 26.4% YoY, maintaining one of the strongest loan-deposit growth profiles among small private banks.
6. J&K Bank: Advances increased 25.5% YoY (+5% QoQ) while deposits grew 16.8% YoY. Total business growth remained above 20%, continuing its strong operating momentum.
7. Bank of India: Advances grew 18.6% YoY and deposits 16.2% YoY, with Retail, Agriculture and MSME segments continuing to drive growth.
8. CreditAccess Grameen: GLP grew 16.4% YoY while borrower additions increased 17.5% YoY. PAR 90+ improved to 1.5% and collection efficiency remained strong at 99.68%, indicating improving asset quality.
9. L&T Finance: Retail loan book grew 28% YoY while retail disbursements increased 36% YoY. Retailisation remained at 98%, consistent with management's strategy.
10. Ujjivan Small Finance Bank: Gross loan book increased 28.9% YoY while disbursements grew 41.5% YoY. GNPA improved to 2.17%, down 35 bps YoY.
11. M&M Finance: Business assets grew 12.5% YoY, with disbursements up 21.5% YoY. Asset quality remained broadly stable despite a seasonally weaker quarter.
12. Canara Bank: Credit grew 18% YoY while deposits increased 11.7% YoY. Loan growth continues to outpace the industry, although deposit growth remains relatively lower.
13. Tamilnad Mercantile Bank: Gross advances increased 27% YoY to ₹57,306 crore. Deposit data will provide better context, but credit growth remains strong.
14. Karur Vysya Bank: Advances increased 17% YoY (+6% QoQ) to ₹1.05 lakh crore, indicating continued business momentum.

Business Momentum Stable

1. Kotak Mahindra Bank: Advances grew 15.1% YoY while period-end deposits increased 11.7% YoY. Average deposit growth improved to 13.6% YoY, although period-end CASA moderated sequentially.
2. HDFC Bank: Advances increased 15.4% YoY while deposits grew 14.7% YoY. Growth remains balanced and consistent with recent quarters.
3. Indian Bank: Advances grew 13.9% YoY while deposits increased 13.3% YoY, reflecting balanced balance-sheet expansion.
4. Equitas Small Finance Bank: Advances grew 26.7% YoY, while deposits increased 10.4% YoY. Credit growth remains healthy, though deposit mobilisation continues to lag.
5. Bandhan Bank: Loans increased 16.4% YoY, while deposits grew 6.6% YoY. CASA improved to 29.4%, with collection efficiency remaining strong at 98.9%.
6. Yes Bank: Advances grew 18.4% YoY while deposits increased 14.3% YoY. CASA declined to 32.7% and the Credit-Deposit ratio increased to 90.5%, making liability growth the key monitorable.
7. South Indian Bank: Gross advances increased 17% YoY to ₹1.04 lakh crore. Deposit trends will provide better insight into overall balance-sheet quality.

Monitor

1. RBL Bank: Advances grew 21% YoY, but deposits slowed to 11% YoY while CASA declined sharply to 29.2% from 33.6% in Q4FY26. Liability franchise remains the key concern.
2. IndusInd Bank: Advances declined 2.3% YoY while deposits grew only 4.5% YoY. CASA continued to soften to 29.5%, indicating slower balance-sheet expansion.
3. Karnataka Bank: Credit increased 16.6% YoY, but deposits grew only 6.9% YoY, widening the gap between asset and liability growth.
4. Utkarsh Small Finance Bank: Gross loan portfolio grew only 2% YoY due to a 36% decline in JLG loans, although the non-JLG portfolio expanded 32.7% YoY. Asset quality continued to improve, with SMA declining to 1.2% and collection efficiency remaining at 99.6%.

Real Estate: Business Momentum Improving

1. Sobha: Sales value increased 76% YoY to ₹3,656 crore, while sales area grew 62% YoY and realizations improved 9% YoY, indicating continued strength in premium residential demand.

Consumer / FMCG: Business Momentum Improving

1. Nykaa: Guided for 30%+ GMV growth and ~30% revenue growth, with Beauty business expected to grow in the high-20% range, supported by strong omnichannel momentum.
2. Dabur: Management expects double-digit revenue and PAT growth, with India FMCG business returning to near double-digit growth, led by Home & Personal Care.
3. Marico: Volume growth accelerated to double digits, with Parachute also reporting double-digit volume growth, indicating improving domestic demand.

Retail: Business Momentum Improving

1. V2 Retail: Revenue increased 58% YoY to ₹997 crore, with SSSG of 7.5%, continuing to outperform most value retail peers.
2. V-Mart Retail: Revenue increased 23% YoY to ₹1,089 crore, with SSSG of 9%, reflecting healthy demand recovery.

Bottom Line

The initial Q1FY27 business updates continue to indicate healthy domestic demand, particularly across lending, retail consumption and residential real estate. Among financials, deposit mobilisation remains the key differentiator, while improving asset quality across NBFCs and MFIs is another encouraging trend. We expect management commentary on deposit growth, NIMs and H2FY27 demand outlook to remain the key focus areas during the upcoming earnings season.

Warm regards,
Omkara Capital Private Limited
www.omkaracapital.in
Disclaimer: This newsletter is for informational purposes only and should not be construed as investment advice. Please consult your financial advisor before making any investment decisions.