Banks, Insurance Q3 Preview - Earnings Momentum Healthy; Business Growth Gaining Pace: Motilal Oswal
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Motilal Oswal Report
The business outlook continues to improve, with credit growth picking up to ~7.3% as of December 17, 2021, led by an uptick in economic activity and the rising pace of vaccinations.
Most subsegments within retail and small and medium enterprise are showing healthy signs of revival, surpassing pre-Covid-19 levels, with strong demand in the home, vehicle, tractor, and small business segments.
On the other hand, the commercial vehicle and micro finance institution businesses continue to trail normalised levels. The credit cards business is also seeing strong momentum, with spends exceeding the Rs 1 trillion mark. Conversely, corporate trends remain muted.
However, capex, particularly for public sector banks, is seeing an uptick, while we expect capex for private to take time to revive.
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