Nifty Bank at 4-mth high; HDFC, ICICI Bank scale new peaks ahead of Q4 nos

In the past one month, HDFC Bank and ICICI Bank have outperformed the market by surging 10% and 9%, respectively, as against 4% rise in the Nifty 50.

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Nifty Bank index hit a four-month high at 53,525.15, gaining nearly 1 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade in an otherwise subdued market, after strong up move in HDFC Bank and ICICI Bank.

 

The sector giants, HDFC Bank (up 1 per cent at ₹1,897.70) and ICICI Bank (up 2 per cent at ₹1,384.40) hit their respective all-time highs in intra-day trades ahead of the March 2025 quarter (Q4FY25) earnings. HDFC Bank and ICICI Bank are scheduled to announce Q4FY25 results on Saturday, April 19, 2025.

 

At 10:51 AM; Nifty Bank, the top gainer among indices eligible in derivatives, was up 0.60 per cent at 53,434.25, as compared to 0.02 per cent decline in the Nifty 50. Nifty Bank was trading at its highest level since December 16, 2024. The index had hit a record high of 54,467.35 on September 26, 2024.

 

Besides HDFC Bank and ICICI Bank, Canara Bank, IDFC First Bank, IndusInd Bank, Bank of Baroda and Punjab National Bank were trading higher by up to 1 per cent on the NSE.

 

In the past one month, HDFC Bank and ICICI Bank have outperformed the market by surging 10 per cent and 9 per cent, respectively. In comparison, Nifty 50 was up 4 per cent doing the same period.

 

In this earnings season, the brokerage firm’s positive surprise candidates are HDFC Bank, Bajaj Finance and ICICI Bank – in all three cases an operating-performance (primarily margin) driven expectations.  Q4 Earnings Expectations

 

BNP Paribas India expects earnings growth to bottom out in the current quarter as loan growth starts to pick up from here on, making up for any small incremental margin erosion that spills into Q1FY26. In general, BNP Paribas India expects that with the cost-of-funds peak already behind us, the margin impact will be limited for most (in fact, a small positive for an NBFC like Bajaj Finance).

 

According to analysts, most investors feel that most asset classes (even gold and treasuries) are likely to be extremely correlated in the near term and vulnerable to news-flow shocks. However, they feel that recent developments do impact India less than many peers, a domestic oriented sector like financials even more so (foreign capital outflows seen as a primary second-order pressure point), making it a viable outperformance candidate as emerging dynamics offer greater medium-term visibility and markets adjust to the variances within the ‘new normal’.

 

However, analysts at Emkay Global Financial Services expect Q4FY25 to be another soft quarter for private banks and non-banking finance companies (NBFC)-micro finance institutions (MFIs), given persisting growth/asset-quality pangs in the unsecured loan portfolio. However, public sector banks (PSBs) are likely to bounce back slightly, aided by treasury gains at the fag-end of the quarter and better recoveries.  “The tariff war is unlikely to directly hurt the financial sector, though we need to watch for a 2nd order impact on growth/SME asset quality if the tariff issue is not resolved soon and macros slow down meaningfully,” the brokerage firm said in BFSI Q4FY25 preview. Analyst recommends being selective with banks that exhibit better growth/margin and asset quality resilience, with preferred picks remain ICICI Bank, HDFC Bank, Axis Bank, KVB, SBI, and Indian Bank. 

Meanwhile, HDFC Bank could report stable Q4FY25 results, as it remains focussed on balancing its credit-deposit ratio (CDR) and balance sheet management, predict analysts. India’s largest private sector bank, they believe, could report a net profit growth of 4 per cent, on average, on a year-on-year (Y-o-Y) basis for Q4FY25. This, however, would mean a flat performance on a sequential basis. On the net interest income (NII) front, analysts remain divided and see the growth between -7.6 per cent and 9 per cent Y-o-Y. CLICK HERE FOR MORE DETAILS

 

Continuing with its healthy financial performance, ICICI Bank may see double digit growth in net profit during Q4FY25, expect analysts. That apart, NII, they said, could clock high single digit growth on a Y-o-Y basis in Q4FY25 with a steady net interest margin (NIM) sequentially. Among key monitorables, analysts said deposit growth, and margin outlook would be on investors’ radar. CLICK HERE FOR MORE DETAILS