Goldman Sachs downgraded Indian banking stocks due to increased cost of funds, consumer leverage, and asset quality concerns.
Goldman Sachs downgraded Indian banking stocks, including SBI, ICICI Bank, and YES Bank, due to rising pressure on cost of funds, consumer leverage concerns, and potential asset quality challenges. The investment bank reduced earnings estimates for the financial sector by 5% on average for FY25E and 2% for FY26E, as the "Goldilocks period" of strong growth and visible profitability is over. ROAs are expected to start moderating due to increased pressure on margins and slower loan growth.
February 23, 2024
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