New Delhi, July 20 -- Indian banks are expected to witness stronger credit growth and stable asset quality in the coming quarters, while recovery in net interest margins (NIMs), deposit costs and retail loan growth will remain key factors for the sector's earnings outlook, according to brokerage firm Equirus.

In its mid-quarter review of the first set of Q1 FY27 banking results, Equirus said, "Entering 2QFY27, asset quality and capital remain strong, while deposit costs appear close to bottoming."

The brokerage said the key focus in the coming months will be "the trajectory of NIM recovery into 2HFY27, the durability of retail/unsecured loan growth, and whether corporate capex inflects sufficiently to sustain the current loan-growth mom...