HDFC, ICICI, KMB, Axis Bank Q1 results today: Key expectations

HDFC Bank Ltd, ICICI Bank Ltd, Kotak Mahindra Bank Ltd (KMB) and Axis Bank Ltd are among private lenders that would be announcing their June quarter results on Saturday. 

Among the four lenders, KMB is expected to lead the profit growth, followed by Axis Bank, HDFC Bank and ICICI Bank, as per Nomura. The foreign brokerage sees net profit for KMB rising 19 per cent YoY to Rs 3,920 crore. Axis Bank is seen logging 17 per cent YoY growth in profit at Rs 6,820 crore, followed by HDFC Bank (up 3 per cent at Rs 18,780 crore) and ICICI Bank (up 2 per cent at Rs 129.60 crore).

In the case of net interest income (NII), KMB is seen reporting 11 per cent YoY growth, followed by ICICI Bank (9 per cent growth), Axis Bank (8 per cent) and HDFC Bank (7 per cent). In the case of pre-provision operating profit,  KMB is seen clocking 10 per cent growth, while the rest three are seen reporting 6-8 per cent growth.

MOFSL noted that the external benchmark- linked loans have largely absorbed the full rate cut impact, thanks to the repo rate that is largely flat for the past six months. For the June quarter, this brokerage expects net ineterest margin (NIM) for HDFC Bank, ICICI Bank and Axis Bank to see a marginal decline and KMB to witness moderation. 

"NII is estimated to grow by 8.5 per cent YoY (up 3.1 per cent QoQ) for HDFC Bank and 10.5 per cent YoY (4.1 per cent QoQ) for ICICI Bank. Axis Bank's NII is likely to grow by 10.6 per cent YoY/3.7 per cent QoQ, and Kotak at 10.1 per cent YoY/1.5 per cent QoQ," MOFSL said.

What to watch
MOFSL said interactions with most of the banks indicate a stable asset quality outlook. However, it would closely monitor business loans and commercial vehicle segment amid concerns related to the West Asia conflict.

For HDFC Bank, the management commentary on net interest margin (NIM) progression from here on will be key, Macquarie said. For ICICI Bank, Kotak Mahindra Bank and Axis Bank, management guidance on key vectors for FY27 will be important in context of geopolitical and El Niño-related monsoon risks, Macquarie said in its Q1 preview note.

"With ECLGS benefit (mainly for banks) and receding effects of West-Asia conflict, we expect asset quality noise to gradually recede, thereby leading to earnings uptick for banks as well as NBFCs in H2. Management clarity should also emerge soon in HDFCB/KMB," Nuvama said.