Earnings reports from major Indian banks, including HDFC Bank Ltd and ICICI Bank Ltd, are anticipated to indicate that profit margins may have reached their lowest point. This expectation follows a series of interest rate cuts by the Reserve Bank of India (RBI) and recent tax incentives aimed at boosting economic activity.
The RBI reduced the benchmark interest rate by a total of 100 basis points earlier this year, with Governor Sanjay Malhotra noting that the impact of this rate reduction has been widespread across various sectors. According to estimates, net interest margins for most banks are projected to hit cycle lows during the July-September or October-December quarters, provided there are no further cuts to the key interest rate.
Market analysts are particularly interested in observing the trajectory of loan growth in light of the recent rate reductions and the government’s consumption tax cut. IndusInd Bank Ltd may face challenges in its loan growth, as it has reportedly been curtailing lending to enhance its risk profile, a strategic move highlighted by Bloomberg Intelligence after the bank disclosed accounting discrepancies earlier this year.
Additionally, Hindustan Unilever Ltd, the leading consumer goods manufacturer in India, is expected to reflect the impact of the government’s GST cut implemented in September. The Indian division of Unilever Plc indicated last month that it expects its second-quarter performance to remain stable or show low single-digit growth, attributing this to the consumption tax cut, which has led to supply chain disruptions.
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Published on October 17, 2025.
