Banks Q4 Results Preview: HDFC Bank, ICICI Bank to SBI - Lenders to see subdued earnings with NIM print | Einsmark news

The Indian banking sector is expected to place subdued growth in earnings in Q4FY25, powered by modest loan and deposit growth, pressure on net interest margins (NIMS) and rising slides into unsecured and microfinance segments. However, improved story and regulatory changes can help credit costs. According to Motilal Oswal Financial Services (MOFSL), the net interest income (NII) for its bank coverage is estimated to rise by 3.9%, while operating profit can fall before the conditions (PPOP), but is growing 3.5% consecutive. Private banks to tax (PAT) are expected to decline 3% year, while PSU banks can produce a 4.5% growth in the year. The total earnings for MofSL’s bank universe are increased in Q4FY25 a modest 0.5% yoy, with an estimated 11.8% Cagr on FY25–27E. Credit growth Outlook system-wide credit growth has moderated in Q4FY25 to 11.1%, dropped from 16.5% a year ago, due to a weaker demand in insured products, tension in unsecured loans and a high credit-deposit (CD) ratio. Mofsl projects credit growth to remain muted at 12% in FY26E. Deposit trends deposits grew by 10.2% year, with ongoing challenges in mobilizing low-cost Casa deposits, as depositors preferred the deposits with high returns. This trend is likely to increase the cost of funds (COF) and further pressure NIMs. With lower inflation, MofSL expects two to three rate cuts in FY26, which can affect the yields of the assets, especially in the first half of the financial year. Nim Outlook As RBI’s repo rate cuts begin to take effect, the lending yields are mitigated, while financing costs are expected to continue to increase in 1HFY26 due to ongoing attempts to attract deposits. A decrease in the weighted average lending rate (WALR) on outstanding loans indicates the transfer of rate cuts. However, the 50 BPS CRR reduction in December 2024 and recent MCLR adjustments by selected PSU banks can offer NIMs in the short-term support. Here is what you can expect from the first quarter results from the top banks: HDFC Bank Q4 Results Trailer India’s largest borrower in the private sector, HDFC Bank, is expected to deliver a 3.2% year-on-year increase in net profit for Q4FY25, with the net interest income (NII) which is likely to grow, according to MOFSL. The cost ratios are expected to remain stable, while margins can see a slight moderation. Glips are expected to be contained, and the quality of asset quality is expected to improve. ICICI Bank Q4 Results Preview ICICI Bank is expected to report strong performance in Q4FY25, supported by healthy business growth and further improvement in asset equality. It is estimated that the net profit will rise by 12.3%, with NII likely to grow by 9.2%. Margins are also expected to expand during the term. Axis Bank Q4 results preview of the net profit of Axis Bank is expected to rise by 0.8%, while NII is expected to grow 5.8% yoy. The margins are likely to remain stable. Improved other income and lower cost ratios can support total profitability, while credit costs are expected to decline. Axis bank asset equality is likely to remain broad. SBI Q4 Results Preview State Bank of India (SBI), the country’s largest public sector financier, is expected to report a 10% drop in the net profit for Q4FY25, while NII could rise by 2.6%. The margins are expected to rally marginally on a successive basis. However, both progress and deposit growth are expected to remain before industry trends. Credit costs are expected to normalize, with a marginal improvement in asset quality. The top sector chooses MOFSL’s best shares in the banking sector includes ICICI Bank, HDFC Bank, SBI and AU Small Finance Bank, citing their strong fundamentals and visibility of earnings. Mofsl has assigned ‘Buy’ ratings on all four of its top banks. The broker set the following target prices: HDFC Bank | Buy | Target Price: £ 2,100 ICICI Bank | Buy | Target Price: £ 1,600 SBI | Buy | Target Price: £ 925 AU Small Finance Bank | Buy | Target Price: £ 700 Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions. First published: 15 Apr 2025, 1:22 pm Ist