(Bloomberg) -- Indian banks' earnings have added to signs of a slowdown in the banking sector after a selloff triggered by the country's biggest private sector lender last week.
HDFC Bank Ltd., among the first major banks to report, saw disappointing results which showed falling net interest margins and weaker deposit growth. ICICI Bank Ltd. and Kotak Mahindra Bank Ltd. experienced their slowest profit growth in years. However, their performance seemed to alleviate market concerns of slowing credit growth, as it was within analyst expectations.
India's central bank said on Friday that it won't consider interest rate cuts unless inflation settles firmly around the 4% target.
Holiday quarter earnings from SK Hynix Inc., South Korea's second-most valuable firm, are expected to show its last operating loss of the cycle, supported by its dominant market share in AI memory chips and a global chip demand recovery. While Samsung Electronics Co. disappointed earlier this month, the country's chip output and shipments grew the most in years in November, reviving optimism about the outlook.
Highlights to look out for:
Tuesday: Axis Bank's (AXSB IN) net interest margin may shrink 8 basis points, estimates compiled by Bloomberg show, due to higher deposit costs. Trends for slippages and overall asset quality should be mostly stable, Kotak Institutional Equities analysts said. Investors are paying attention to the bank's integration with Citigroup's business, with Bloomberg Intelligence predicting costs could jump over a quarter as it expands its physical and digital network.
Wednesday: Nidec's (6594 JP) third-quarter operating profit probably jumped from a year earlier and held steady sequentially, estimates show. BI senior analyst Masahiro Wakasugi expects results to barely meet estimates. The small precision motor and automotive units should remain solid, though a loss is expected in electric-vehicle motors. The operating profit target of 220 billion yen ($1.5 billion) for fiscal 2024 should be maintained, he added.
- Siam Cement's (SCC TB) fourth-quarter performance is projected to be “disappointing,” weighed down by lower spreads in its petrochemical business and from an impairment loss from its construction building material business, Asia Plus Securities analyst Prasit Rattanakijkamol said in a note. The Thai company's adjusted net income may fall 41% sequentially, estimates show. While the bulk of the challenges facing the cement and petrochemical businesses is expected to be reflected in the final quarter of the year, 2024 should be a better year, RHB analyst Chatree Srismaicharoen said.
Thursday: SK Hynix's (000660 KS) quarterly revenue is expected to jump 35%, estimates show, as global demand for chips returns and AI adoption picks up pace. DRAM sales will probably surge 58%. Inventory restocking and a pickup in Chinese smartphone demand has contributed to higher DRAM average selling prices, analysts from HSBC said. Chief Executive Kwak Noh-Jung is confident, predicting the AI memory boom may help double the firm's market value over the next three years.
- Hyundai Motor's (005380 KS) profit is expected to surge 63%, supported by overall contributions from its segments. The years-long sales slide in China remains a concern as it highlights the Korean automaker's challenges in the world's largest auto market. Developments in the Indian market will also be closely watched, after one of its units signed an accord to invest 60 billion rupees ($722 million) in India's Maharashtra state.
--With assistance from Shwetha Sunil, Felix Tam and Ryotaro Nakamaru.
(Updates throughout)
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