India’s banking sector is poised for a robust earnings recovery over the next three years, with compound annual growth rates projected to reach approximately 15 percent through fiscal 2028, according to new research from Motilal Oswal Financial Services.
The brokerage highlights a structural divergence within the sector, forecasting that private-sector lenders will significantly outperform their public-sector counterparts in terms of earnings momentum during this period.
The growth outlook is anchored in sustained credit expansion across the Indian economy.
Motilal Oswal’s analysis suggests that private banks are better positioned to capitalize on this lending surge due to superior asset quality and operational efficiency compared to state-owned enterprises.
This shift underscores a broader trend in emerging-market banking, where private institutions are increasingly capturing market share and profitability from legacy public-sector players.
This positive trajectory for Indian banks aligns with recent data showing resilient credit growth in the wider financial sector.