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The second wave of pandemic is expected to cause short-term disruption in credit off take, said HDFC Securities in a report.

"We expect recovery in credit growth over the medium term for our coverage universe, " the report said.

However, it pointed out that industrial credit growth remained muted although registering positive YoY growth for the first time since September.

"The large industrial credit, which constitutes 82 per cent of industrial credit, continued to de-grow at (-) 0.8 per cent YoY as the Capex cycle still remains elusive."

"Growth in credit to medium industries continued to surge, reaching 28.8 per cent YoY aided by disbursals under the ECLGS."

Nonetheless, micro and small industries continued to grow slowly at just 0.5 per cent YoY.

"Within industrial credit, credit for roads increased by 34.4 per cent YoY. Credit to the textile sector continued to dip (-)0.9 per cent MoM, although YoY growth stood at 4.6 per cent."

"Certain segments such as metals, all engineering, telecom and construction saw persistent YoY de-growth."

Besides, it cited that service sector credit growth decelerated significantly, reaching 1.4 per cent YoY in March 2021, after having improved to 9.3 per cent YoY in February 2021.

"Within this segment, growth in credit to NBFCs increased to 4.5 per cent YoY while growth in credit for 'other services' de-grew (-) 6.7 per cent YoY."

"Overall, trade credit growth improved to 11.8 per cent YoY. Wholesale and retail trade credit growth improved to 21.2 per cent YoY and 3.3 per cent YoY respectively."

In terms of the personal loan segment, the report cited a continued improvement in growth to 10.2 per cent YoY after hitting a 10-year low of 9.1 per cent YoY in January.

"This trend was led by growth in home loans and other personal loans."

"Growth in credit card receivables improved to 7.8 per cent YoY. Vehicle loan growth continued to move closer to October 20 levels, reaching 9.5 per cent YoY."

It said that personal loan has been the most significantly impacted segment by Covid-19.

In addition, agricultural credit growth continued to accelerate, reaching 12.3 per cent YoY boosted by back-to-back surplus monsoon seasons.