HDFC BANK & ICICI BANK Q4 Results Are Coming: Watch Out for These Analyst Warnings that Can Impact the Stock Market

 

Based on the analyst expectations for Q4 FY25 results, here are some potential points that could worry investors or potentially impact the stock market negatively if the actual results or forward-looking guidance fall short:

For HDFC Bank:

1. Net Interest Margins (NIMs): This is a primary focus. Analysts expect NIMs to be flat or contract marginally compared to the previous quarter (around 3.4-3.5%).
   • Worry Point: If NIM compression is worse than expected, or if the management commentary doesn't provide a clear and confident path towards margin recovery post-merger (despite recent measures like savings rate cuts), it could disappoint investors. Persistent margin pressure impacts core profitability.
2. Loan Growth Momentum: While deposit growth has been strong (around 14% YoY), loan growth is expected to be more moderate (around 5.4% YoY based on provisional data) as the bank focuses on reducing its Credit-Deposit Ratio (CDR).
   • Worry Point: If loan growth is significantly lower than this modest expectation, or if guidance suggests a prolonged period of subdued growth compared to peers while the bank rebalances its book, it could raise concerns about market share and future growth prospects.
3. Pre-Provision Operating Profit (PPOP): Analysts expect a notable YoY decline in PPOP (around 11-14%), though some QoQ improvement is anticipated.
   • Worry Point: While the YoY decline is somewhat expected due to merger base effects, a steeper-than-anticipated fall, or lack of sequential improvement, could raise flags about underlying operational efficiency and cost management during the integration phase.
4. Meeting Expectations & Guidance: The stock has performed well recently, hitting new highs.
   • Worry Point: Even if HDFC Bank meets the current moderate expectations, the market might react negatively if the forward-looking guidance on margins, growth recovery, and CDR improvement isn't strong or convincing enough to justify the recent rally.

For ICICI Bank:

1. Net Interest Margins (NIMs): While ICICI's margins are expected to be more resilient, analysts still foresee potential pressure, with expectations of a YoY decline and flat-to-slight sequential moderation (around 4.2-4.3%).
   • Worry Point: If rising deposit costs or the impact of policy rate cuts lead to a more significant NIM compression than anticipated, it could signal broader sector pressure and temper enthusiasm, even with strong profit growth.
2. High Expectations: ICICI Bank is expected to deliver strong double-digit profit growth (10-15% YoY) and robust loan growth (14-15% YoY). Its stock is also near all-time highs.
   • Worry Point: High expectations are already built into the stock price. Any miss on these strong growth numbers, or even results that merely meet expectations without a positive surprise or very strong guidance, could trigger profit-taking.
3. Sustaining Growth: The bank has consistently delivered strong performance.
   • Worry Point: The market will be keenly watching for any signs of moderation in the loan growth trajectory or profitability outlook for FY26. Any hint of a slowdown could be viewed negatively.

In essence:

The main risks highlighted by analysts revolve around margin pressure for both banks (though more pronounced for HDFC Bank) and the high expectations already priced into the stocks, particularly for ICICI Bank. A negative market reaction is most likely if:

• Actual results significantly underperform these analyst forecasts (especially on NIMs or PAT).
• Forward-looking guidance from management is weak, lacks clarity, or signals prolonged challenges in growth or profitability.

Disclaimer: These are only suggestive technical rules that have been found to work well over time in the market. These are not any trading or investing recommendations. We suggest you to take advice from certified experts for trading and investing. Neither PickMyStox nor any of its associates are responsible for any trading or investing loss.