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Informist, Friday, Oct. 17, 2025

By Krity Ambey

NEW DELHI – IndusInd Bank's net profit is likely to remain subdued in the September quarter as the lender continues to deal with the fallout of accounting discrepancies discovered earlier this year. While the bank provisioned entirely for the accounting error in the March quarter itself, the hit to its reputation continues to weigh on advances as well as deposits – both falling on year in the last three consecutive quarters. Analysts caution that the bank could even slip back into the red if the new management chooses to accelerate provisioning for bad loans. 

The bank's earnings for the September quarter, due Saturday, will be the first quarterly results under the new management. IndusInd Bank has a new management after then managing director and chief executive officer and the chief financial officer quit in the aftermath of the accounting discrepancies becoming public. 

IndusInd Bank's net profit is likely to halve from a year ago to INR 5.83 billion in the September quarter, according to the average of estimates given by 10 brokerage firms, with estimates ranging from INR 2.40 billion to INR 10.65 billion. The bank's weak treasury income is also likely to weigh on profit, according to Nomura Equity Research, which has given the lowest profit estimate.

IndusInd Bank reported an 8% fall in net advances at INR 3.27 trillion as of Sept. 30, according to provisional data disclosed by the bank. The bank's deposits fell 5% on year to INR 3.9 trillion at the end of September.

If the bank's September quarter profit aligns with consensus estimates, it will be down 15% sequentially. The bank's business growth is expected to revive after two quarters of decline, Motilal Oswal Financial Services Ltd. said. As of now, the bank is pretty far from the quarterly average profit of INR 18 billion, seen for a year before the accounting fraud came to light.

Following a steep loss of INR 22.36 billion in the March quarter, IndusInd Bank had posted only a modest profit of INR 6.84 billion in the June quarter due to a jump in provisions and worsening asset quality. This trend is likely to continue with slippages staying high, around INR 25 billion in the September quarter, Kotak Securities said. Provisions are also expected to remain elevated but ease 10% from a high base of INR 17.38 billion in the trailing quarter, Prabhudas Lilladher Pvt. Ltd. said. With this fall, the bank's provisions may settle around INR 15 billion in the September quarter.  

The net interest income of the bank may fall 17% on year to INR 44.65 billion, according to the average of estimates from 10 brokerage firms, with projections ranging from INR 41.94 billion to INR 47.05 billion. Sequentially, the net interest income is likely to decline 4%. Nirmal Bang Equities Pvt. Ltd., which has given the lowest income estimate of INR 41.94 billion, has cited a sharp fall in loan growth as the reason behind the low estimate. 

Most brokerages expect the lender's net interest margin to contract in the reporting quarter. Brokerages Prabhudas Lilladher and Kotak see a margin compression of 9–10 basis points on quarter, which could take the bank's NIM to 3.4-3.59% in the September quarter. 

Analysts await the new management's comments post earnings to understand the business strategy in the aftermath of the accounting discrepancy episode. Analysts also suggest that the cost of funds and performance of the microfinance portfolio will be key metrics to track.

The bank's share price, which had fallen over 30% after the discovery of the accounting error, is yet to recover completely. Since the lender's financial results for the trailing quarter, its share price has declined 8%. On Friday, shares of the lender closed 1.6% higher at INR 751 apiece on the National Stock Exchange. The bank's share price needs to recover at least by a quarter to reach the level seen before the accounting discrepancies came to light.

Of the 22 research reports on the stock available with Informist, seven have a 'buy' rating while seven more have a 'sell' rating on IndusInd Bank, with an average target price of INR 740.10. The remaining eight have a 'hold' rating for the bank's stock.

Following are the September quarter earnings estimates for IndusInd Bank from 10 brokerages in descending order of the estimate of net profit in INR million:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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