Month: July 2025

🚀 Bandhan Bank, Bank of Baroda, AU SFB, Bajaj Finance: What Analysts Say After Q1 Updates

India’s leading lenders and NBFCs have announced their Q1 business updates, providing crucial insights into how growth, margins, and deposit mobilization are shaping up in FY26. Let’s take a detailed look at what analysts are saying about Bandhan Bank, Bank of Baroda, AU Small Finance Bank, and Bajaj Finance after their latest numbers.

🏦 Bandhan Bank: CASA Under Pressure, Growth Slows

Key Highlights:

  • CASA ratio fell sharply to 27.06% vs. 33.4% YoY and 31.4% QoQ.
  • Low-cost deposits declined by 5.8% YoY and 11.8% sequentially.
  • Loans and advances grew just 6.4% YoY, but actually contracted 2.5% QoQ to ₹1.34 lakh crore.
  • Net profit dropped ~19% YoY to ₹721 crore.

Analyst View:
Nomura downgraded the stock to Neutral, citing:

“Weak deposit and loan growth, margin pressure, and soft fee income remain key concerns.”

Investor Takeaway:
Watch if Bandhan can rebuild its low-cost deposit base and regain growth momentum.

💼 Bank of Baroda: Solid Retail Gains, Margin Concerns

Q1 Snapshot:

  • Total business up 11% YoY to ₹26.4 lakh crore.
  • Domestic retail advances rose ~17%, deposits grew ~8%.
  • Treasury gains partially cushioned margin softness.

Analyst Rating:
Nomura retained a Neutral stance due to margin pressure but noted healthy business growth.

Investor Takeaway:
Expect stable operations with moderate growth; monitor treasury and core fee income trends.

🌟 AU Small Finance Bank: Strong Growth Continues

Performance Highlights:

  • Gross advances rose 23.1% YoY, 2.6% QoQ.
  • Deposits grew 31.3% YoY, 2.8% QoQ.
  • CASA ratio remained robust; CD ratio at ~87.4%.

Analyst Commentary:
Motilal Oswal Financial Services (MOFSL) maintained a Buy rating:

“Healthy growth in advances and deposits demonstrates the bank’s execution strength.”

Investor Takeaway:
AU SFB remains a high-growth play among small finance banks.

💹 Bajaj Finance: Strong AUM and Customer Acquisition

Business Update:

  • AUM grew 25% YoY to ₹4.41 lakh crore.
  • New loans booked jumped 23% YoY to 13.49 million.
  • Deposit book rose 15% YoY to ₹72,100 crore.

Analyst Consensus:
Most brokerages maintained a Buy rating with ~₹915 target, citing consistent execution and growth visibility.

Investor Takeaway:
Bajaj Finance continues to outperform peers, though valuations remain elevated.

🔍 Quick Comparison Table

CompanyQ1 HighlightsAnalyst View
Bandhan BankCASA decline, weak growthNeutral (Nomura)
Bank of BarodaRetail growth, margins under pressureNeutral (Nomura)
AU SFBRobust advances and depositsBuy (MOFSL)
Bajaj FinanceStrong AUM and loan growthBuy (Consensus)

✅ Summary for Investors
These updates underline how deposit costs and lending growth are diverging across banks and NBFCs. While AU SFB and Bajaj Finance are sustaining momentum, Bandhan faces near-term challenges, and Bank of Baroda remains steady with moderate growth.

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✅ Why Trent Stock Crashed Today: Slower Sales Growth Triggers Sharp Sell-Off

The decline was driven mainly by disappointing growth guidance provided by the company’s management during its Annual General Meeting (AGM).

Here are the key reasons in detail:

1️⃣ Underwhelming Growth Guidance

  • In the AGM, Trent disclosed that its standalone sales for the April–June quarter (Q1 FY26) grew 20% year-on-year.
  • While 20% growth sounds healthy, it is much slower compared to the company’s historical growth trajectory:
    • Between FY2020 and FY2025, Trent achieved an impressive 35% compound annual growth rate (CAGR).
    • Management had earlier set an aspiration of maintaining at least 25% annual growth going forward.
  • Therefore, the latest update fell well short of both historical performance and future ambitions.

This moderation disappointed investors who had come to expect rapid expansion, especially given Trent’s aggressive store rollouts and category additions (like Zudio and Westside).

2️⃣ Broker Downgrades & Lower Estimates

  • Nuvama Institutional Equities, a leading brokerage, reacted swiftly to the update:
    • Downgraded Trent’s stock rating from “Buy” to “Hold.”
    • Slashed the target price from ₹6,627 to ₹5,884.
  • Nuvama also cut its financial projections for the company:
    • Revenue estimates for FY26 and FY27 were lowered by 5–6%.
    • EBITDA (operating profit) forecasts were reduced by 9–12%.

This downgrade added to negative sentiment and triggered heavy selling, especially among institutional investors who hold significant positions in the stock.

3️⃣ Valuation Concerns

  • Even before this correction, Trent was trading at rich valuations due to its exceptional growth record and brand strength.
  • The sharp deceleration in sales growth raises doubts over whether the premium valuation is justified in the near term.
  • As a result, investors rushed to lock in profits, leading to a steep intraday fall.

🛒 A Quick Look at Trent’s Business

Trent operates some of India’s fastest-growing retail brands:

  • Zudio: Affordable fashion targeting mass-market consumers.
  • Westside: Mid-to-premium apparel and lifestyle stores.
  • Star Bazaar: Hypermarket chain selling groceries and daily essentials.

In recent years, Zudio’s aggressive expansion (especially in Tier 2 and Tier 3 cities) has driven stellar growth, making Trent a favorite among growth investors.

📊 Market Reaction Today

📈 DetailsData
Intraday DeclineOver 10%
Closing LossNearly 9%
Closing Price~₹5,652 per share
Position in Nifty 50Biggest loser of the day
Nuvama New Target Price₹5,884
Earlier Target Price₹6,627

🔭 What Should Investors Watch Next?

If you hold or plan to invest in Trent, here are the key factors to track going forward:

✅ Q1 FY26 detailed results—to see if there is more weakness or if this is just a temporary moderation.

✅ Management commentary on demand trends—especially in discretionary spending categories like apparel.

✅ Store expansion plans—the company still plans to add 250+ new stores in FY26, which could revive growth.

✅ Peer performance—how competitors like V-Mart and Shoppers Stop are faring in the same environment.

✨ Conclusion

While Trent remains a strong retail brand with ambitious long-term goals, today’s sell-off shows that lofty valuations leave little room for growth disappointments.

Investors should be cautious and monitor the next earnings reports closely before making fresh commitments.

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Foxconn Recalls Hundreds of Chinese Workers from India, Clouding Apple’s Manufacturing Ambitions

In a move that could dent Apple’s aggressive manufacturing plans in India, Foxconn Technology Group — the Chinese company assembling iPhones — has recalled hundreds of its Chinese engineers and technicians from its Indian factories.

According to a Bloomberg report citing unnamed sources, more than 300 Chinese employees have already returned home, leaving mostly Taiwanese support staff on the ground. The recall, which began around two months ago, has not been officially explained by Foxconn, but it comes amid Beijing’s efforts to restrict technology transfers and equipment exports to India and Southeast Asia. Analysts see this as part of China’s broader strategy to discourage manufacturing migration to rival economies.

Impact on iPhone Production in India

The departure of trained Chinese workers is expected to slow the training of Indian staff and hamper the transfer of know-how critical for scaling up production lines. As a result, costs could rise, and efficiency could dip.

One Bloomberg source noted that while the move is unlikely to compromise product quality, it will probably reduce assembly-line efficiency, especially as Apple prepares to ramp up production of the next-generation iPhone 17.

Apple declined to comment on the situation, and Foxconn did not respond to queries. Indian government officials were reportedly informed of the move but have not observed any major impact on production yet.

A Critical Time for Apple in India

Foxconn has gradually expanded its footprint in India over the past four years, making the country a significant iPhone hub. India now accounts for about 20% of global iPhone output, a milestone that reflects Apple’s strategy to diversify away from China amid rising geopolitical tensions and supply-chain risks.

Apple CEO Tim Cook has frequently praised the skill of China’s assembly workforce, highlighting that expertise — rather than cost alone — has been crucial to Apple’s manufacturing dominance there. The recall underscores the challenges India faces in closing this skill gap.

What’s Next?

The timing of Foxconn’s withdrawal is delicate. Apple is not only preparing the iPhone 17 ramp-up but is also working on plans for a new factory in India as part of its long-term diversification strategy.

With Washington and Beijing locked in an extended trade rivalry, countries like India and Vietnam are keen to attract high-value manufacturing. However, the reliance on Chinese expertise and components shows that shifting supply chains is easier said than done.

The coming months will be crucial in determining whether Apple can sustain its India expansion plans without the steady presence of Chinese engineers.

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RBI Bans Pre-Payment Charges on Floating-Rate Loans to Protect Borrowers

The Reserve Bank of India (RBI) has announced that banks and lenders will no longer be allowed to charge pre-payment penalties on floating-rate loans. The new guidelines will take effect from January 1, 2026, covering all loans and credit facilities sanctioned or renewed on or after this date.

According to the RBI, this move is designed to make finance more affordable for Micro and Small Enterprises (MSEs) and protect individual borrowers from unfair lending practices.

Equal Treatment for Individuals and MSEs

Under the new rules:

  • Lenders cannot charge pre-payment fees on floating-rate loans taken by individuals for non-business purposes, even if the loan has co-borrowers.
  • For business loans availed by individuals and MSEs, no pre-payment charges can be levied by:
    • Commercial Banks (except Small Finance Banks, Regional Rural Banks, and Local Area Banks)
    • Tier 4 Urban Cooperative Banks
    • NBFCs in the Upper Layer (NBFC-UL)
    • All India Financial Institutions

Additionally, Small Finance Banks, Regional Rural Banks, Tier 3 Urban Cooperative Banks, State and Central Cooperative Banks, and NBFCs in the Middle Layer (NBFC-ML) cannot impose pre-payment fees on loans up to ₹50 lakh.

Focus on Small Business Finance

The RBI emphasized that supporting small businesses is a priority, stating:

“Availability of easy and affordable finance to MSEs is of paramount importance.”

The regulator also noted that reviews had found inconsistent practices regarding pre-payment charges, leading to frequent complaints and disputes.

No Charges on Early Closure of Overdrafts

The guidelines also cover cash credit and overdraft facilities. If a borrower notifies the lender in advance and closes the account on time, no pre-payment charges can be applied. Additionally, if the lender itself asks a borrower to pre-pay, no fees are permitted.

Transparency Requirements for Lenders

To improve transparency, lenders must clearly disclose pre-payment rules in:

  • The sanction letter
  • The loan agreement
  • The Key Facts Statement (where applicable)

“No pre-payment charges which have not been disclosed as specified herein shall be charged by a regulated entity,” the RBI said.

No Lock-in Period for Pre-Payment

Borrowers will be able to pre-pay partially or fully at any time without a lock-in period, regardless of the source of funds.

Earlier Guidelines Withdrawn

With these new measures, all previous circulars and guidelines on pre-payment charges stand repealed. The fresh directions follow public feedback received on the draft circular issued in February 2025.

Industry Reaction

SBFC Finance welcomed the RBI’s decision. Sanket Agrawal, Chief Strategy Officer at SBFC Finance, commented:

“It is a positive move by the RBI to ensure that customers are protected from pre-payment charges on loan closure. However, since this applies to loans sanctioned from January 1, 2026, the impact on current loan books will be limited. Borrowers also typically don’t pre-pay long-tenure loans early, so the effect on fee income will take time.”

He added that the RBI continues to take proactive measures to protect customers and make credit more accessible at fair costs throughout the repayment cycle.

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Indian Markets End Lower Amid Late Selling in Financial and Metal Stocks

The Indian stock markets closed slightly in the red on Thursday, July 3, after a volatile session marked by early gains and late selling pressure. The BSE Sensex slipped 170 points (0.20%) to settle at 83,239, while the NSE Nifty 50 lost 48 points (0.19%) to finish at 25,405.

Earlier in the day, both indices had surged, with the Sensex rising over 440 points. However, profit booking in financial and metal shares dragged benchmarks lower toward the close.

Among the major laggards on the Sensex were Kotak Mahindra Bank, Bajaj Finserv, Bajaj Finance, Adani Ports, State Bank of India, Titan, Tata Consultancy Services, and Trent. In contrast, Maruti Suzuki, Infosys, NTPC, Asian Paints, Hindustan Unilever, and Eternal ended in the green, supported by strength in the auto and pharma sectors.

Sectoral performance was mixed. Autos and pharmaceuticals advanced, while metals and real estate stocks underperformed. Broader market indices were largely flat, reflecting a cautious approach by investors.

Global Cues

Globally, Asian markets posted mixed performances. Japan’s Nikkei, South Korea’s Kospi, and China’s Shanghai Composite closed higher, while Hong Kong’s Hang Seng index declined. European markets were trading on a mixed note, and US benchmarks, including the S&P 500 and Nasdaq, had closed at record highs in the previous session.

Currency Movement

The Indian rupee appreciated against the US dollar, closing near 85.55. The gain was driven by expectations of an interest rate cut in the US and positive trade signals between the US and Vietnam. This helped provide some support to domestic market sentiment, despite the late-day selling in equities.

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