India's consumption credit market displayed early signs of recovery in the first half of FY26, though credit card issuance remained a significant outlier with sharp declines, according to a comprehensive analysis by JM Financial Institutional Securities.

Credit Card Segment Faces Sharp Decline

The credit card segment witnessed a notable slowdown in new issuances, contrasting sharply with recovery trends in other consumption credit categories. The data revealed concerning metrics for the credit card industry during the September quarter of FY26.

Asset quality trends in credit cards showed mixed signals, with early delinquencies improving through a 40 basis point sequential decline in PAR 1–30. However, stress in the PAR 31–90 bucket increased for private banks compared with FY25 levels, indicating persistent risks in portions of the unsecured borrower base.

Personal Loans and Consumer Durables Show Strong Recovery

In stark contrast to credit cards, personal loans demonstrated robust recovery momentum. The segment reversed its FY25 decline with impressive growth figures across multiple timeframes.

Public sector banks led the personal loan recovery, supported by a sharp increase in average ticket sizes, while asset quality improved across lenders and borrower categories. Consumer durable loans also rebounded significantly, with private banks regaining market share in this segment, though asset quality trends remained mixed with rising longer-tenure delinquencies despite improvement in early buckets.

Secured Lending Segments Show Steady Growth

The secured lending landscape demonstrated consistent improvement, with public sector banks gaining substantial market share across key segments. Home loan disbursements grew 11% in the first half of FY26, with PSBs accounting for half of origination value.

Growth patterns skewed towards higher-ticket loans, reflecting rising residential property prices, while smaller ticket segments showed early signs of stress. Auto loans and two-wheeler loans recorded modest improvement in disbursement growth, though asset quality weakened in auto loans, particularly for NBFCs and lower ticket sizes.

Lenders Adopt Cautious Approach to New Borrowers

The report identified a broad-based decline in new-to-credit (NTC) borrower share across segments, especially in personal loans, two-wheelers and consumer durables. This trend indicates lenders are prioritising seasoned borrowers amid concerns around unsecured credit quality.

Early delinquencies have either improved or remained stable across most segments, except auto loans driven by NBFCs, with cautious underwriting remaining evident across the industry. The overall disbursement growth across consumption segments ranged between 6% and 35% year-on-year in the September quarter of FY26, compared with contraction or low single-digit growth during FY25.

Market Outlook and Investment Preferences

JM Financial noted that this recovery trend could support loan growth in FY27 if current patterns sustain. The brokerage maintains a selective approach on financial stocks, expressing preference for specific institutions across different categories:

Preferred Banking Stocks:

• ICICI Bank
• Axis Bank
• SBI
• City Union Bank
• DCB Bank

Preferred NBFC and HFC Stocks:

• Aditya Birla Capital
• Shriram Housing Finance
• PNB Housing Finance
• Aadhar Housing Finance

JM Financial Limited has completed the inter-se transfer of equity shares between promoter group members, with SNK Investments Private Limited successfully acquiring shares from Aruna Nimesh Kampani. The transaction, originally disclosed under SEBI SAST Regulations in December 2025, has now been completed with detailed post-transaction disclosures filed on January 1, 2026.

Transaction Completion Details

SNK Investments Private Limited acquired exactly 9,21,250 equity shares from Aruna Nimesh Kampani at ₹144.20 per share, excluding brokerage and taxes. The acquisition price remained within the regulatory framework specified under Regulation 10(1)(a) of the SAST Regulations.

Shareholding Pattern Changes

The completed transaction resulted in the following changes to shareholding patterns:

Promoter Group Holdings Unchanged

Despite the inter-se transfer, the overall promoter and promoter group shareholding in JM Financial Limited remained stable:

Regulatory Compliance

The transaction was completed under the exemption provided by Regulation 10(1)(a)(ii) of the SEBI SAST Regulations for inter-se transfers among promoter group members. SNK Investments Private Limited filed the requisite disclosure under Regulation 10(6) with both BSE Limited and National Stock Exchange of India Limited.

The disclosure was signed by Ankita Gokani, Company Secretary of SNK Investments Private Limited, confirming compliance with all applicable regulatory requirements and timelines specified under the SAST Regulations.