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Informist, Tuesday, Jan. 20, 2026

 

By Krity Ambey

 

NEW DELHI – IndusInd Bank is expected to report subdued earnings for the December quarter and brokerages forecast a sharp decline in net profit following a fourth consecutive quarter of contraction in advances and deposits. Some analysts have also flagged the possibility of the bank being in the red due to stress in the microfinance loan portfolio, which was seen in the trailing quarter as well.

 

IndusInd Bank's net profit for the December quarter is likely to fall nearly 83% on year to INR 2.45 billion, based on the average of estimates from nine brokerage firms. Net profit forecasts vary from INR 133 million by Prabhudas Lilladher Pvt. Ltd. to INR 8.82 billion by Nirmal Bang Equities Pvt. Ltd. Prabhudas Lilladher expects the bank's provisions to decline 20% sequentially, which would still be 20% higher on year, which may continue to weigh on profitability.

 

Stress in the lender's microfinance portfolio had raised its provisions 44% on year in the September quarter, leading IndusInd Bank to report a loss of INR 4.45 billion. Kotak Securities Ltd. and Emkay Financial Services Ltd. expect provisions to remain elevated in the December quarter again and estimate a loss of INR 168 million and INR 2.06 billion, respectively. 

 

The net interest income of the bank is likely to contract 17% on year to INR 43.46 billion in the December quarter, according to the average of estimates from 11 brokerages, with projections ranging from INR 42.20 billion estimated by Emkay Global to INR 44.61 billion estimated by YES Securities (India) Ltd. Sequentially, the net interest income is likely to be down 1.4%. 

 

The bank's net interest margin is expected to remain broadly stable sequentially, supported by a fall in the cost of deposits offsetting lower asset yields, but brokerage views are mixed. While some analysts expect a slight contraction in the margin for the quarter, others see a scope for a modest improvement. The bank had reported a net interest margin of 3.93% in the September quarter.

 

Asset quality, particularly in the microfinance portfolio, remains a key focus area, with analysts expecting vulnerabilities to persist year-on-year but the pressure to ease sequentially. Several brokerages expect slippages to decline on a sequential basis, due to relatively lower stress in the microfinance book, but provisioning levels are still expected to remain elevated on a year-on-year basis.

 

Analysts await management commentary on strategy, asset quality trajectory, funding costs, and return ratios, particularly amid leadership change at the bank. Following the discovery of accounting discrepancies in the bank's derivatives portfolio last year, the then managing director and chief executive officer and the chief financial officer quit, and a new management was appointed. The bank's earnings for the December quarter, due Friday, will be the second quarterly results under the new management.

 

Of the 11 research reports on IndusInd Bank available with Informist, six have a 'sell' recommendation, with an average target price of INR 686. This is 24% lower than the current market price. Three brokerages have a 'buy' recommendation with a target price between INR 825 and INR 900, and two have a 'hold' recommendation for the stock with a target price of INR 785 and INR 900. Shares of IndusInd Bank, which have risen 28% since it announced the September quarter earnings, closed at INR 905.15 on Tuesday, down nearly 5% from the previous day's close, on the National Stock Exchange.

 

Following are the December quarter earnings estimates for HDFC Bank Ltd. from 11 brokerages in descending order of the estimate of net profit in INR million: 

 

Brokerage	Net Interest Income	Net Profit
Nirmal Bang Equities Pvt Ltd	42,435	8,818
Elara Securities (India) Pvt Ltd	43,537	3,126
ICICI Securities Ltd	44,561	3,089
Systematix Shares and Stocks (India) Ltd	44,027	2,288
YES Securities (India) Ltd	44,607	1,681
Motilal Oswal Financial Services Ltd	42,854	1,312
Nuvama Wealth Management Ltd	43,000	1,100
JM Financial Institutional Securities Pvt Ltd	42,482	486
Prabhudas Lilladher Pvt Ltd	44,411	133
Kotak Securities Ltd	43,982	(-)168
Emkay Global Financial Services Ltd	42,200	(-)2,056
Average	43,463.27	----

 

End

 

 

Edited by Deepshikha Bhardwaj

 

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