Q1 Results: HDFC Bank and ICICI Bank Post Strong Profit Growth, India Cements Faces Losses

The first quarter of the fiscal year 2025-26 has painted a mixed picture for key players in India’s financial and industrial sectors. While leading private sector banks, HDFC Bank and ICICI Bank, have showcased robust profit growth, cement major India Cements has reported a loss, highlighting the varying economic headwinds and tailwinds faced by different industries.

Banking Sector Shines: HDFC Bank and ICICI Bank Deliver Impressive Performances

India’s banking heavyweights have kicked off the new fiscal year on a strong note. HDFC Bank, the country’s largest private sector lender, announced a substantial 12.2% year-on-year rise in its standalone net profit, reaching ₹18,155 crore for the quarter ended June 30, 2025. This impressive growth was primarily fueled by a healthy increase in net interest income (NII) and a noticeable rise in non-interest income. The bank also made headlines by recommending a 1:1 bonus share issue and a special interim dividend of ₹5 per equity share, signaling confidence in its financial health and a commitment to shareholder returns.

However, it’s worth noting that while the standalone profit soared, HDFC Bank’s consolidated net profit saw a slight dip of 1.31% to ₹16,258 crore, compared to the same period last year. This minor decline in consolidated figures can be attributed to a significant increase in provisioning, which jumped to ₹14,442 crore from ₹2,602 crore a year earlier, including a floating provision of ₹9,000 crore. Despite this, the overall picture for HDFC Bank remains positive, with total income rising to ₹99,200 crore.

ICICI Bank, another private sector giant, also demonstrated a commendable performance, reporting a 15.5% year-on-year increase in its standalone net profit, reaching ₹12,768 crore for Q1 FY26. The bank’s net interest income (NII) grew by a solid 10.6% year-on-year to ₹21,635 crore. ICICI Bank’s asset quality also showed improvement, with the gross non-performing asset (GNPA) ratio reducing to 1.67% as of June 30, 2025, from 2.15% a year ago. This robust growth across key financial metrics underscores the strong underlying demand for credit and the bank’s effective management of its loan book.

The strong performances by HDFC Bank and ICICI Bank reflect the broader positive momentum within the Indian banking sector. Many banks are benefiting from improving asset quality, healthy credit growth, and stable net interest margins, contributing to a buoyant outlook for the financial services industry.

Cement Sector Faces Headwinds: India Cements Reports a Loss

In contrast to the banking sector’s gains, India Cements has found itself in a challenging position, reporting a net loss of ₹131.36 crore for the first quarter of FY26, a significant turnaround from a profit of ₹71.33 crore in the corresponding period last year. While the company’s revenue remained relatively flat year-on-year at ₹1,024.74 crore, an exceptional loss of ₹123.77 crore due to impairment costs related to two subsidiaries played a substantial role in pushing the company into the red.

Despite the overall loss, India Cements did see some operational improvements. Its domestic sales volume grew by 11.6% year-on-year to 2.18 million tonnes, with average capacity utilization reaching 61% for the quarter. Furthermore, cement realizations net of logistics costs improved by 5.7% sequentially, and the company managed to turn around its EBITDA, reporting ₹83.2 crore compared to an EBITDA loss of ₹24.7 crore in the March quarter of the last fiscal.

The challenges faced by India Cements highlight the pressures within the broader cement industry. While demand is expected to grow in the mid-to-high single digits in Q1 FY26, driven by increased infrastructure spending, the sustainability of recent price hikes amidst rising input costs and fresh capacity additions remains a critical factor for profitability. The early onset of monsoons is also likely to impact demand in June, adding to the sector’s complexities. The industry also grapples with rising pet coke prices, which are expected to reflect in costs from Q1 FY26, making strong realization growth crucial for maintaining margins.

Overall, the Q1 results underscore the diverse performance across India’s key economic sectors. While the banking sector continues its growth trajectory, driven by robust fundamentals and increasing demand, certain industrial sectors like cement are navigating a more challenging landscape marked by cost pressures and competitive dynamics. Investors and analysts will be closely watching how these trends evolve in the coming quarters.