Federal Bank Q1 results preview: Will the growth story hold?

Summary: As Federal Bank gears up to report Q1 FY25-26 earnings, investors await signs of sustained growth and pristine asset quality. Will it deliver another quarter of double-digit profit growth? Federal Bank is set to announce its Q1 FY25-26 earnings on August 2, 2025, and expectations are high. Following a year marked by steady profitability and best-in-class asset quality, investors are eager to see if the bank can sustain its momentum into the new fiscal year. With double-digit earnings growth, improving margins, and a clean balance sheet, Federal Bank has gradually evolved from a mid-sized private player into a strong “quality” franchise. Q1 results will test whether this transformation is sustainable. Steady Gains in FY25 Set the Tone In the previous quarter (Q4 FY24-25), Federal Bank reported: Net Profit: Rs 1,030.2 crore (+13.7 per cent YoY) Net Interest Income (NII): Rs 2,377.4 crore (+8.3 per cent YoY) Net Interest Margin (NIM): 3.12 per cent Gross NPA: 1.84 per cent Net NPA: 0.44 per cent Provision Coverage Ratio (PCR): 75.4 per cent These numbers capped off a consistent FY24-25, where Federal Bank posted double-digit profit growth in all four quarters. Notably, Q1 FY24-25 profit was Rs 1,009.5 crore, rising 18.2 per cent YoY, supported by 19.5 per cent YoY growth in NII and strong advances. On the asset quality front, the bank achieved its best performance in a decade by Q4, with NPAs at multi-year lows and robust provisioning. This strong base sets up Q1 FY25-26 for comparison. What t