Four leading private sector banks—HDFC Bank Ltd, ICICI Bank Ltd, Kotak Mahindra Bank Ltd, and Axis Bank Ltd—are scheduled to announce their financial results for the June quarter today. Analysts have shared key expectations regarding their performance, with a particular focus on profit growth and Net Interest Income (NII).
Profit Growth Projections
According to Nomura's analysis, Kotak Mahindra Bank is anticipated to lead the pack in profit growth. The foreign brokerage forecasts a 19 percent year-on-year (YoY) increase for KMB, with net profit reaching Rs 3,920 crore. Axis Bank is expected to follow, logging a 17 percent YoY profit growth to Rs 6,820 crore.
HDFC Bank's net profit is projected to rise by 3 percent YoY to Rs 18,780 crore, while ICICI Bank is seen reporting a 2 percent YoY increase, reaching Rs 129.60 crore.
Net Interest Income (NII) and Pre-Provision Operating Profit (PPOP)
In terms of Net Interest Income (NII), Kotak Mahindra Bank is again expected to show strong performance with an 11 percent YoY growth. ICICI Bank is projected to achieve 9 percent growth, followed by Axis Bank at 8 percent, and HDFC Bank at 7 percent YoY.
For Pre-Provision Operating Profit (PPOP), KMB is forecast to achieve 10 percent growth, while the other three banks are expected to report growth in the range of 6-8 percent.
Detailed NII Estimates
MOFSL provided more granular NII estimates: HDFC Bank's NII is estimated to grow by 8.5 percent YoY (3.1 percent quarter-on-quarter), and ICICI Bank's by 10.5 percent YoY (4.1 percent QoQ). Axis Bank's NII is likely to see 10.6 percent YoY (3.7 percent QoQ) growth, with Kotak Mahindra Bank at 10.1 percent YoY (1.5 percent QoQ).
Net Interest Margin (NIM) and Asset Quality Outlook
MOFSL noted that external benchmark-linked loans have largely absorbed the full impact of rate cuts, thanks to a relatively flat repo rate over the past six months. For the June quarter, MOFSL anticipates a marginal decline in Net Interest Margin (NIM) for HDFC Bank, ICICI Bank, and Axis Bank, with KMB expected to witness moderation.
Discussions with most banks indicate a stable asset quality outlook. However, analysts will be closely monitoring business loans and the commercial vehicle segment due to potential concerns arising from the West Asia conflict.
Macquarie highlighted that management commentary on HDFC Bank's NIM progression will be crucial. For ICICI Bank, Kotak Mahindra Bank, and Axis Bank, management guidance on key vectors for FY27 will be important, especially in light of geopolitical risks and potential El Niño-related monsoon impacts. Nuvama expects asset quality noise to gradually recede, leading to an earnings uptick for banks and NBFCs in the second half of the fiscal year.