For BFSI, a muted FY26 was the year of stock-picker

India’s banking, financial services and insurance (BFSI) sector may have had a muted year on the surface, but a closer look tells a very different story. FY26, marked by global uncertainty, earnings downgrades and foreign investor outflows, did not reward broad sector bets—but it strongly rewarded stock-pickers.A Mint analysis of 724 BFSI stocks shows that nearly one in five companies delivered strong gains despite weak benchmark performance. As many as 131 stocks, or over 18% of the universe, generated returns of more than 25% during the year.

This stands in contrast to headline indices such as the Nifty Bank and Nifty Financial Services, which fell about 2.5% and 6.2%, respectively, and remained under pressure for most of FY26.The divergence highlights a shift in market behaviour from sector-driven rallies to company-specific performance. The list of outperformers reflects this trend. MCX surged 124%, LKP Finance gained 112%, while RBL Bank and L&T Finance rose 67% and 57%, respectively.

These gains were driven by individual factors such as earnings recovery, improving asset quality or business-specific triggers, rather than any broad-based sector tailwind.The broader distribution of returns reinforces this shift. Around 10% of BFSI stocks delivered moderate gains between 10% and 25%, while another 8% posted returns in the 1-10% range. This means that more than a third of the sector ended FY26 with positive returns, despite a challenging macro environment.At the same time, losses were equally widespread.

About 34% of stocks declined by up to 25%, while 16% fell between 10% and 25%. Nearly 8% of companies posted marginal declines of up to 10%. This wide dispersion shows that FY26 was not about whether to invest in BFSI,