Citi’s India Strategy Q2 preview anticipates 13% YoY EBITDA growth, led by commodities, and signals that NIMs may have bottomed out for financials with improving credit demand.
What Does Citi’s Q2 India Strategy Preview Reveal About Market Trends?
About Citi’s India Q2 Outlook
Citi’s latest India Strategy – Q2 Preview anticipates broad-based earnings stability with an estimated 13% year-on-year (YoY) growth in EBITDA, primarily led by the commodities sector.
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The brokerage highlights that ex-commodity and ex-financial segments are expected to show EBITDA growth of around 10%, while overall corporate performance continues to reflect post-pandemic normalization and demand recovery across core sectors.
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Key Earnings Highlights and Sectoral Outlook
Citi expects headline EBITDA growth of 13% YoY, driven by robust performance in metals, energy, and cement sectors.
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Excluding commodities, earnings are expected to rise by 5%, supported by improved operating leverage in consumer goods and technology.
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Citi also notes early signs of a rebound in urban consumption, aided by GST rate cuts and festive demand momentum, which could sustain volume growth through Q3FY26.
Financials: Margins Bottoming Out
In the financial sector, Citi believes that Net Interest Margins (NIMs) may have bottomed out as credit growth accelerates and deposit repricing pressures ease.
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The brokerage expects private banks to lead profitability recovery through better cost efficiency and higher fee income. NBFCs, meanwhile, are projected to deliver double-digit loan book growth supported by festive and rural demand.
Consumption and Demand Trends
Citi’s preview emphasizes monitoring management commentary on the sustainability of urban consumption recovery.
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A combination of GST cuts, lower inflation, and early festive purchases is driving incremental demand, but analysts caution that rural consumption may remain uneven. The brokerage expects discretionary categories such as auto and durables to benefit most from seasonal momentum.
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Broader Market Takeaways
Citi maintains a balanced view on India’s market trajectory for FY26, citing resilient earnings despite global uncertainty.
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The brokerage underscores that bottom-up stock selection remains key, especially as valuation differentials between large-caps and mid-caps have widened. It expects corporate commentary to provide cues on pricing discipline, input cost moderation, and export-led growth trends.
Investor Takeaway
Indian-Share-Tips.com Chief Market Strategist Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, observes that Citi’s preview reinforces India’s steady macro and earnings narrative. He adds that investors should focus on sectors with visible demand recovery and margin resilience — particularly financials, auto, and consumption — during the upcoming results season.
Related Queries
Why Does Citi Expect Margins to Improve in Q2FY26?
How Will the Festive Demand and GST Cuts Impact Q2 Results?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
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