RBI just SLASHED repo rate by 50 bps to 5.5% Biggest rate cut in YEARS. Your EMIs, stocks, and economy are about to SHIFT. Here’s what it means for: 📈 Stock Market 🏠 Real Estate 🏦 Banks 🚗 Autos 🛒 FMCG 💻 IT & more What’s the Repo Rate? 🤔 It’s the rate at which RBI lends to commercial banks. 🔁 Lower repo = lower cost of funds for banks 📉 Which means cheaper loans for: - Homebuyers - Auto buyers - Businesses RBI uses repo rate as a monetary lever to either cool inflation or stoke growth The Big Move: 50 bps → 5.5% 🎯 ✅ Second cut in 2025 (after 25 bps in Feb) ✅ Most aggressive cut since COVID-era easing 📉 From 6.5% → 5.5% in 3 months = clear shift in stance This isn’t a small nudge, this is a policy pivot. The macro winds are turning cold: 🇺🇸 Trump’s tariff threat = export shock 🇨🇳 China = demand drag 🛢️ Oil > $88 = imported inflation 📉 Global bond yield chaos = risk-off India’s growth story needs a domestic demand engine. This cut primes it. Banking: Margin Compression vs Credit Growth 📉 NIM pressure: Lending rates fall faster than deposit rates 📈 But retail + MSME credit = poised to grow 10–12% YoY 🧠 Credit-deposit gap = likely to widen NBFCs (non-deposit takers) benefit faster 🔎 Stocks: Bajaj Finance, Shriram Finance, HDFC Bank, ICICI Bank Real Estate: Affordability Surge Cheaper home loans = better EMI-to-income ratios 🏦 SBI’s effective rate already near 7.9% 🏗️ Developers are sitting on 4.5L+ unsold units across metros 📈 Tier 2–3 housing demand expected to grow 14% YoY (Knight Frank) 🔎 Stocks: DLF, Sobha, Godrej Prop Autos: Double Boost from Credit + Sentiment - Entry-level car EMIs drop significantly - Tractor + 2W demand rebounds in rural India - Commercial vehicle financiers benefit from SME uptick 📊 FADA reports 11% YoY rise in PV bookings after Feb rate cut 🔎 Stocks: Hero MotoCorp, Maruti, M&M FMCG + Durables: Wallet Room Expands Lower EMIs = more discretionary spending Rural income multiplier effect kicks in 📈 FMCG rural sales grew 6% in Q1 2025 (NielsenIQ) 🏠 AC, TV, fan sales see 20–25% seasonal bump 🔎 Stocks: HUL, ITC, Voltas, Crompton Infra + Capex: Revival Signal? 📉 Cost of capital now lowest in 3 years 🧱 Capex-linked manufacturing (steel, cement) gets tailwind 🏗️ Infra pipeline worth ₹111 lakh crore under Gati Shakti 🔎 Stocks: L&T, Siemens, ABB, JSW Steel 🧠 SBI calls this the “early signs of credit cycle revival” INR Weakness = Export Upside USD/INR hit 86.6 post-April cut 60–65% of IT/ITeS revenue = USD-linked Rupee depreciation = margin sweetener 🔎 Stocks: Infosys, TCS, Coforge, Persistent 💡 Also positive for pharma & chemicals exporters Energy: Split Impact 📉 Oil import bill may rise → pressure on BPCL, HPCL 📈 But lower rates help fund clean energy projects Adani Green, Tata Power benefit from lower debt servicing costs 🧠 India imports ~85% of its crude. INR weakening = real macro risk. Stock Market: Sector Rotation Ahead Post-rate-cut trends from Feb: - Realty +1.2% - Consumer Durables +1.3% - Nifty down -0.4% (profit booking + global tension) 📉 Bond yields fell to 6.44% = debt looks more attractive Expect sector-specific rallies, not broad-based euphorias. EMI Math - Let’s Talk Real Savings 🏡 Loan Amount: ₹36L 📉 Old Rate: 8.65% 📉 New Rate (post 50 bps cut): 8.15% ⏳ Tenure: 30 years Old EMI: ₹28,651 New EMI: ₹27,446 💰 Monthly savings: ₹1,205 💰 Annual savings: ₹14,460 🧠 That’s ₹1.2L saved over 5 years, money that goes back into spending/investing.