Indian banks' market capitalisation rises in Q3 on festive demand, tax cuts: S&P Global
- IBEF
- January 9, 2026
According to S&P Global, the Indian banking sector saw an increase in market capitalisation in Q3 2023 due to higher economic activity resulting from improved business sentiment, festive season demand, and tax incentives. The increase demonstrates higher levels of investor confidence in the Indian banking sector because of improved economic conditions and stable asset quality indicators. S&P Global stated that there was an increase in banking stock prices due to improved earnings visibility and positive sentiment arising from consumer-driven activity during the festive season. Operational performance during the quarter remained robust, supported by higher credit offtake during the festive season and improved utilisation across sectors such as automobiles, housing, consumer durables, and services. This demand translated into stronger interest income and stable margins, enhancing earnings outlooks for lenders. At the same time, proactive regulatory oversight and prudent provisioning frameworks helped maintain confidence in asset quality despite a dynamic global environment.
The macroeconomic environment and government policies have aided banks in improving their valuations. During this period, demand for credit has increased, and banks have performed better operationally, contributing to higher market value. The increase in market capitalisation indicates that the banking sector remains strong and that there is growing investor sentiment towards India’s banking sector in the medium term.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
