New Delhi, July 7 -- Indian banks are expected to report a steady first quarter of FY27, with earnings broadly flat as pressure on net interest margins (NIMs) and weaker non-interest income continue to weigh on profitability, according to Kotak Institutional Equities.

The brokerage said the banking operating environment has improved compared with the previous quarter. Retail credit performance remains resilient, corporate balance sheets are conservatively leveraged, and government-backed schemes such as ECLGS and CGTMSE are helping support MSME lending.

Despite strong headline credit growth, Kotak said underlying demand remains soft. "We believe risks are skewed to the downside, particularly given the slower-than-expected revival in ret...