Earnings Review
IndusInd Bk reports profit post Q4 blip, misses Street view
This story was originally published at 19:34 IST on 28 July 2025
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--IndusInd Bank cost of deposits 6.44% vs 6.50% qtr ago
--IndusInd Bank corporate loan book INR 1.32 tln on Jun 30, down 16% on year
--IndusInd Bank Apr-Jun recoveries INR 2.39 bln vs INR 3.11 bln qtr ago
--IndusInd Bank Apr-Jun upgrades INR 2.30 bln vs INR 2.16 bln qtr ago
--IndusInd Bank Apr-Jun write-offs INR 6.64 bln vs INR 18.16 bln qtr ago
--IndusInd Bk: Saw calibrated actions on cost optimisation in Apr-Jun
--IndusInd Bank Apr-Jun fresh additions INR 25.67 bln vs INR 50.14 bln qtr ago
--IndusInd Bank Apr-Jun average liquidity coverage ratio 141%
--IndusInd Bk: Apr-Jun reflected resilience of core ops, fincl transparency
--IndusInd Bk:Actively working to integrate diverse ops under 'One IndusInd'
--IndusInd Bk:Took decisive action on legacy issues, strengthened governance
--IndusInd Bank CASA ratio 31.48% as on Jun 30
--IndusInd Bank: Leadership transition progressing well
--IndusInd Bank provision coverage ratio 70% as on Jun 30
--IndusInd Bank: Saw robust recovery from challenges of previous quarter
--IndusInd Bank deposits INR 3.97 tln as on Jun 30, down 0.3% on year
--IndusInd Bank advances INR 3.34 tln as on Jun 30, down 4% on year
--IndusInd Bank Apr-Jun provisions INR 17.38 bln vs INR 10.50 bln year ago
--IndusInd Bank Apr-Jun net interest margin 3.46%, up 121 bps on quarter
--IndusInd Bank Basel III capital adequacy ratio 16.63% as on Jun 30
--IndusInd Bank net NPA ratio 1.12% as on Jun 30 vs 0.95% qtr ago
--IndusInd Bank Apr-Jun net interest income INR 46.40 bln, down 14% on year
--IndusInd Bank gross NPA ratio 3.64% as on Jun 30 vs 3.13% qtr ago
--IndusInd Bank Apr-Jun total income INR 144.20 bln vs 149.88 bln yr ago
--IndusInd Bank Apr-Jun net profit INR 6.84 bln vs INR 21.52 bln yr ago
--Analysts saw IndusInd Bank Apr-Jun net profit INR 7.21 bln
--IndusInd Bank Apr-Jun net profit INR 6.84 bln
By Priyasmita Dutta
NEW DELHI – IndusInd Bank's net profit declined by a whopping 68% year-on-year as provisions increased by nearly 66% for the quarter ended June. This is the private sector bank's biggest year-on-year decline in profit since 2016, according to data available with Informist. At INR 6.84 billion, the net profit for the Apr-Jun quarter missed the Street estimate of INR 7.21 billion.
The bank returned to profitability in Apr-Jun after a rare quarterly loss of INR 22.36 billion in the March quarter, following discrepancies in the bank's derivatives portfolio accounting.
The bank's provisions in Apr-Jun jumped to INR 17.38 billion as asset quality worsened significantly. The bank released its financial results post-market hours. On Monday, shares of the bank closed at INR 802.05 on the National Stock Exchange, down 2.6% from the previous close.
Gross non-performing asset ratio worsened to 3.64% from 3.13% a quarter ago and 2.02% a year ago. The net NPA ratio rose to 1.12% from 0.95% in the March quarter and 0.60% a year ago. The provision coverage ratio was consistent at 70%, the bank said.
The "clean and profitable Q1 results" mark a "robust recovery from the challenges of the previous quarter," the bank's Chairman Sunil Mehta said. "The bank has taken decisive action on legacy issues, strengthened governance, and enhanced operational controls," Mehta said, adding that the leadership transition was also "progressing well".
Following the regulatory discrepancy saga in the last quarter, IndusInd Bank has faced several exits at the senior management, including Chief Executive Officer Sumant Kathpalia and Deputy CEO Arun Khurana.
"The bank remains focused on profitability, cost discipline, and stakeholder engagement, while building a sustainable franchise across our core businesses," Mehta said. "These results reflect our commitment to transparency, resilience, and long-term value creation for all our stakeholders."
Even as the asset quality worsened, IndusInd Bank's fresh slippages nearly halved on a year-on-year basis to INR 25.67 billion from INR 50.14 billion in the March quarter. The bank wrote off INR 6.64 billion in Apr-Jun, almost a third of the INR 18.16 billion written off in the March quarter. Recoveries during the quarter were INR 2.39 billion, lower than INR 3.11 billion in the trailing quarter.
The bank's Apr-Jun performance reflects the resilience of its core businesses and financial transparency, with profit being supported by a steady recovery in core businesses and calibrated actions on cost optimisation, Soumitra Sen and Anil Rao, members of the Committee of Executives of the bank, said. "We are confident that the initiatives being worked on will help the bank to build on the momentum in the coming quarters," they said.
On the business side, IndusInd Bank's net interest income declined 14% year-on-year to INR 46.40 billion in the June quarter. This, however, was higher than the INR 42.81 billion estimated by analysts. Sequentially, the net interest income rose 52%.
The NII declined as the Mumbai-headquartered bank's advances decreased 4% year-on-year to INR 3.34 trillion as of June 30. Deposits of the bank declined 0.3% on year to INR 3.97 trillion. Within loans, IndusInd Bank's corporate loan book declined 16% on year to INR 1.32 trillion. The corporate book accounted for 40% of the bank's loan portfolio, down from 46% in the trailing quarter and 44% a year ago. The bank's current account savings account ratio stood at 31.48% as of the end of June.
A nine-basis-point on-year decline in the cost of deposits to 6.44% partly offset the decline in interest income. Sequentially, the cost of deposits declined 6 bps. The bank's net interest margin fell 79 bps on year to 3.46% in the June quarter, but rose 121 bps sequentially.
The bank's capital adequacy ratio was 16.63% at the end of June, higher than the 16.24% at the end of March, but lower than the 17.55% at the end of June last year. The bank's average liquidity coverage ratio during Apr-Jun was 141%, higher than the regulatory requirement of 100%.
IndusInd Bank is "actively working to integrate its diverse business" lines under the ‘One IndusInd' approach, unlocking synergies and delivering a unified banking experience to customers, the bank said.
Due to the bank's muted business performance, its total income declined 3.8% year-on-year to INR 144.20 billion in the June quarter. Sequentially, however, it was up 27%. End
Edited by Saji George Titus
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