HDFC Bank, India’s largest private sector bank, is expected to post single-digit growth in net interest income (NII) and profit for the first quarter of FY26. The bank is scheduled to announce its Q1 results on July 19, 2025, and market participants are closely watching the numbers.
Despite witnessing strong deposit inflows, analysts believe the slower pace of loan growth and margin compression could limit earnings performance for the quarter. According to projections, both NII and profit are expected to grow by around 7% year-on-year.
“Margins are expected to remain under pressure due to faster repricing of loans triggered by interest rate cuts,” analysts noted.
Soft Loan Growth and Lower Margins – The Key Concerns
The bank’s earnings are being closely monitored as recent interest rate cuts have led to quicker repricing of loans, which is likely to compress net interest margins (NIMs). While deposits continue to grow at a healthy pace, the sluggish credit growth means the incremental benefit from deposits may not fully translate into profits.
Slower loan growth and tighter margins are the primary reasons behind the expected modest rise in NII and PAT.
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Brokerage Estimates Reflect Cautious Optimism
Estimates from analysts polled by Moneycontrol show a narrow range of expectations, which means any deviation—either a beat or a miss—could lead to sharp movements in HDFC Bank’s stock price post-results.
Among brokerages:
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Kotak Institutional Equities has shared the most optimistic outlook for the bank’s earnings.
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On the other hand, Equirus Research expects the slowest growth among the polled firms.
This divergence in outlook reflects the uncertainty around the impact of interest rate dynamics and credit growth trajectory on bank earnings.
Investor Focus Ahead of Results
With the bank’s Q1FY26 results just around the corner, investors will be looking at:
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Loan growth trends,
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Net interest margin figures,
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Deposit growth performance,
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Commentary on asset quality and credit demand post-merger.
If HDFC Bank manages to surprise positively, it could trigger a strong market reaction. However, if the numbers align with the modest expectations, the stock may remain range-bound.
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