New Delhi, Sept. 19 -- The Indian banking sector is navigating a tricky phase marked by slowing loan growth, margin pressures, and elevated credit costs. However, brokerage houses Motilal Oswal and Nomura believe the cycle of earnings downgrades is nearing its end, with strong banks well placed to lead the next leg of growth.

According to Motilal Oswal, consensus estimates for banks' earnings in FY26 have been trimmed sharply, particularly for mid-sized lenders exposed to microfinance and unsecured retail segments. Bandhan Bank, Equitas, IDFC First Bank, and RBL Bank have seen cuts of 41-95 percent to FY26 earnings forecasts. Larger diversified banks, however, have shown greater resilience. ICICI Bank, HDFC Bank, and State Bank of India ...