Earnings Outlook
IndusInd Bk PAT seen rising 10%, NIMs to fall
This story was originally published at 10:00 IST on 24 July 2024
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By Kshipra Petkar
MUMBAI – IndusInd Bank's net profit for the quarter ended June is seen rising 9.7% on year to 23.3 bln rupees, according to the average of estimates by 11 brokerage firms. On a sequential basis, net profit is expected to be either stable or a tad lower. The rise in the bottomline is aided by the net interest income of the bank, analysts said.
The net interest income of the bank is seen rising by nearly 15% on year to 55.95 bln rupees for the reporting quarter, as per the average of estimates. On a sequential basis, it is seen rising by 4.1%.
"NII (net interest income) growth will be slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances. Consequently, NIM (net interest margin) will be slightly lower sequentially," YES Securities said. In the previous quarter, the net interest margin was 4.26%.
As per the provisional figures released by the bank, the net advances grew 16% on year to 3.48 trln rupees as of Jun 30 and total deposits were up 15% on year and 4% on a quarter at 3.99 trln rupees as on Jun 30. The current account and savings account ratio fell further to 36.7% as of Jun 30, compared with 37.9% a quarter ago and 39.9% a year ago.
The asset quality of the bank is expected to remain stable. However, some marginal rise could be seen in the microfinance and rural portfolios, Sharekhan said in a pre-earnings report. Gross non-performing asset ratio was at 1.92% and the net non-performing asset ratio stood at 0.57% as on Mar 31. Motilal Oswal expects the credit costs to remain under control.
"We expect provisions to increase due to higher slippages from the MFI (microfinance) portfolio but trends appear to be less worrisome as compared to other players. We are building slippages of around 2% (17 bln rupees)," Kotak Institutional Equities said.
Key focus area would be the cost of funds, trends on operating expenses growth and situation on the ground pertaining to the MFI portfolio.
The bank is scheduled to announce its results for Apr-Jun on Friday. On the National Stock Exchange, the shares of the bank ended 0.7% lower 1,413.2 rupees on Tuesday.
Following are the Apr-Jun earnings estimates of IndusInd Bank based on reports compiled by Informist from 11 brokerage houses:
| Brokerage Name | Net Interest Income (in mln rupees) | Net Profit (in mln rupees) |
| Anand Rathi Share and Stock Brokers Ltd | 55,675 | 23,772 |
| Emkay Global Financial Services Ltd | 55,141 | 24,055 |
| IDBI Capital Market Services Ltd | 56,254 | 23,190 |
| Kotak Institutional Equities | 54,854 | 22,669 |
| Motilal Oswal Financial Services Ltd | 55,800 | 23,400 |
| Nirmal Bang Equities Pvt Ltd | 55,193 | 24,987 |
| Nomura Equity Research | 54,300 | 22,400 |
| Nuvama Wealth Management Ltd | 55,400 | 23,500 |
| Prabhudas Lilladher Pvt Ltd | 54,856 | 21,898 |
| Sharekhan Ltd | 55,680 | 22,750 |
| YES Securities (India) Ltd | 62,259 | 23,636 |
| Average | 55,946.55 | 23,296.09 |
| Number of responses | 11 | 11 |
End
Edited by Aditya Sakorkar
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