On April 19, 2025, several major Indian banks, including HDFC Bank and ICICI Bank, are set to announce their fourth-quarter earnings for the financial year 2024-25. Analysts are closely watching these results, particularly focusing on net interest income (NII), net interest margins (NIM), and overall asset growth.
HDFC Bank, India's largest lender, is anticipated to report a net profit growth ranging between 2.5% to 7% for the quarter ending March 2025. Estimates from various brokerages suggest that the bank's topline could fall between ₹16,918 crore and ₹17,650 crore. Furthermore, the Net Interest Income (NII) is expected to jump by 5.5% to 9%, landing in the range of ₹30,669 crore to ₹31,640 crore.
Brokerage firm Goldman Sachs has expressed confidence in HDFC Bank's recent interest rate cuts, interpreting them as a positive sign for deposit growth and in alignment with the Reserve Bank of India's (RBI) stance. They maintain a 'Buy' rating on the bank, with a price target of ₹2,087 per share. Equirus Securities forecasts a 7.5% year-on-year increase in NII, projecting it to reach ₹31,269.3 crore, alongside a profit estimate of ₹16,977.8 crore, marking a 2.8% YoY increase.
In contrast, ICICI Bank is also expected to announce healthy results, with NII potentially rising by 7.6% to 11% compared to the same quarter last year. Estimates suggest that its NII could be between ₹20,543 crore and ₹21,170 crore. Analysts predict that ICICI Bank will report a low double-digit profit increase in Q4, benefiting from the recent CRR cut by the RBI.
However, the overall sentiment in the banking sector remains cautious. Motilal Oswal anticipates a slight contraction in HDFC Bank's NIMs, attributing this to slower growth in the banking sector. They expect overall banking earnings to bottom out in FY26, with credit growth stabilizing around 12% YoY. Nuvama Institutional Equities echoes this sentiment, predicting softer loan growth and deposits for both banks in Q4.
HDFC Bank's recent performance has shown promising trends, with a 7.7% YoY growth in period-end advances reaching ₹27.73 lakh crore as of March 31, 2025. Retail loans have seen a 9% increase, while commercial and rural banking loans rose by 12.8%. However, corporate and wholesale loans have declined by 3.6%.
Current Account and Savings Account (CASA) deposits for HDFC Bank stood at ₹9.44 lakh crore, marking a 3.9% increase YoY and an 8.2% rise sequentially. Sharekhan estimates that HDFC Bank's NII for the March quarter will be ₹31,136 crore, a 7.1% increase from the previous year.
In a significant move, HDFC Bank has reduced interest rates on savings accounts by 25 basis points, following a broader trend in the industry after the RBI lowered its repo rate. Savings accounts with balances below ₹50 lakh will now earn 2.75% per annum, down from 3%, while those with balances above ₹50 lakh will yield 3.25%, reduced from 3.50%.
As the earnings season progresses, investors are keenly observing how these financial institutions adapt to changing economic conditions. The banking sector's performance is crucial, especially as it reflects consumer confidence and economic health. With a robust financial framework and a widening market presence, both HDFC Bank and ICICI Bank are positioned to capitalize on India's long-term growth trajectory.
In the lead-up to the earnings announcements, the share price of HDFC Bank closed at ₹1,905.80 on April 17, 2025, following an 8% rally over the last five sessions. Similarly, ICICI Bank shares finished at ₹1,407, marking a 9% increase in the same period.
As these banks prepare to unveil their results, the market awaits insights into their management strategies, which will be critical for sustaining growth and navigating the challenges ahead. The commentary from both banks post-results will be closely scrutinized for indications of future performance and strategic direction.
Overall, the upcoming announcements from HDFC Bank and ICICI Bank are expected to provide a clearer picture of the banking sector's resilience in the current economic landscape. Investors and analysts alike are hopeful for positive outcomes, which could signal a recovery and growth phase for the financial sector.
