📊 Modest Q1 Ahead: Auto-Banking Sectors May Struggle, Oil Might Defy Odds
India Inc. is heading into a muted first quarter, with early indicators pointing to a slowdown in automobile and banking sector earnings, while the oil & energy sector could surprise on the upside.
Let’s break down the forecast by sectors and understand how Vizzve Financial is reading the signals.
🚗 Auto Sector: Supply Chain Overhang, Weak Demand
Despite easing chip shortages, vehicle registrations dropped by 4.2% YoY, especially in entry-level segments. Rising loan delinquencies and elevated fuel costs have softened consumer sentiment.
Key issues:
OEM margin pressure
Weak rural demand
EV transition strain on legacy models
🔍 Vizzve Take:
“Auto financiers are cautious. Delinquency rates on small-ticket auto loans have risen by 11% QoQ,” notes Vizzve’s Q1 lending pulse report.
Verdict: Likely miss on earnings estimates.
🏦 Banking Sector: NIM Compression and Cautious Credit
Private and PSU banks are expected to report single-digit growth, impacted by:
Falling Net Interest Margins (NIMs)
Slow credit off-take, especially in MSME
Sticky deposit rates
While loan books have grown, profitability has not kept pace.
Vizzve Financial’s latest quarterly review shows:
Deposit growth of 6.8% (vs 9.2% YoY)
Rising competition from NBFCs and fintech lenders
Verdict: Sluggish quarter, especially for mid-tier banks.
🛢️ Oil Sector: A Silver Lining?
Brent crude has rebounded to $86/barrel, and demand from China is rebounding. Oil PSUs and upstream players like ONGC and Oil India may outperform thanks to:
Inventory gains
Strong refining margins
Export opportunities
Energy-intensive companies like Reliance may also report stable results.
📈 Vizzve Insight:
“Energy remains the best-positioned sector for Q1 alpha. Look at export-exposed firms,” advises Vizzve’s equity strategy desk.
Verdict: Surprise upside likely.
❓ FAQs
Q1: Why is the banking sector underperforming this quarter?
A: High-cost deposits and low credit demand are compressing profit margins, especially for smaller lenders.
Q2: Is the oil sector really rebounding globally?
A: Yes. China’s post-recovery demand and geopolitical supply concerns are pushing up crude prices.
Q3: What role does Vizzve Financial play in analyzing Q1?
A: Vizzve provides proprietary lending and capital flow data that gives deeper insight into sectoral stress and lending appetite.
Q4: Should investors avoid auto stocks this quarter?
A: Cautious short-term, yes. But EV-focused or export-heavy auto firms may still offer value.
Q5: Will this trend affect lending rates for SMEs?
A: Likely. With banks cautious, expect slightly tighter lending norms, especially in the auto and construction-linked sectors.
🧠 Conclusion: Resilience in Pockets
While the broader Q1 may seem unremarkable, strategic investors should keep an eye on oil & energy, and stay cautious on auto and banking. Smart capital reallocation—backed by Vizzve’s insights—can make all the difference.
💼 For a full Q1 Sectoral Dashboard or to access Vizzve’s Institutional Reports, visit Vizzve Financial today.
Follow us on social media: Facebook || Linkedin || Instagram
Published on July 8, 2025 • By Benny
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed