No RBI rate cuts in the near-term! Where are banking stocks headed in the next 3-6 months?

What happened: The RBI raised the repo rate by 25 basis points to 5.50% on 7 October and shifted its stance to calibrated tightening, signalling rate cuts are off the table in the near term. Key numbers: Repo rate 5.50%, up 25 bp. FY27 real GDP growth revised to 7.1%. HDFC Bank deposits +18.8%, advances +16.3%. Why it matters: Analysts say higher rates could raise deposit costs and pressure net interest margins, with impact uneven across banks. Large private lenders with strong liability franchises may hold up better, while banking stocks may see consolidation.

The RBI raised the repo rate by 25 basis points to 5.50% on 7 October and shifted its stance to calibrated tightening, signalling rate cuts are off the table in the near term.

Analysts say higher rates could raise deposit costs and pressure net interest margins, with impact uneven across banks. Large private lenders with strong liability franchises may hold up better, while banking stocks may see consolidation.