IndusInd Bank shares fall 20% after Q2 profit drop, asset quality deterioration

[{"selector":"#anim-a334f1a8-b9b0-4d32-815d-728a9542dea4","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c5b00df4-2ab2-4ed5-b02c-226da4822689","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Shares of Private sector lender IndusInd Bank Ltd. fell as much as 20% on Friday, October 25, after the lender reported its quarterly results after market hours on Thursday.

[{"selector":"#anim-00a9ce9b-dd91-4720-a837-ddf4970cbd21","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-54363bbc-3f0d-413d-932b-7975a8f7f390","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] IndusInd Bank reported a significant drop in its consolidated net profit for the second quarter of FY25, falling 39.5% year-on-year to ₹1,331 crore.

[{"selector":"#anim-833d1ae4-482f-428c-a77c-44f961f3de63","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-fc47778f-a312-402b-917c-1ad4b743dde6","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] The bank’s net interest income (NII), a key indicator of profitability, saw a growth of 5% on-year to ₹5,347 crore during the July-September quarter, compared to ₹5,077 crore in the same period last year

[{"selector":"#anim-8b5a00b5-7821-47a6-b8d7-08e8f7a49c10","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6ba20f0a-f189-499f-83ac-7cc4be9dbf36","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] However, the growth in NII was below market expectations. The bank’s net interest margin (NIM), a key indicator of profitability, fell to 4.08% from 4.29% in the year-ago period, indicating some pressure on margins.

[{"selector":"#anim-d70d3f8f-b2bd-4dc1-837c-f332d56fd390","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1318c9c7-7b94-479e-a58f-ff225c71dec4","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] IndusInd Bank's asset quality saw deterioration over the June quarter. Gross NPA stood at 2.11% from 2.02% in June, while Net NPA stood at 0.64% from 0.6% in June.

[{"selector":"#anim-21644714-0d1d-462f-9dff-bb1a25ab52c6","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-7d010e4d-c62f-4120-a1e2-3ae6e02ab981","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] In absolute terms, Gross NPA increased to ₹7,638.5 crore from ₹7,126.8 crore in June, while the Net NPA increased to ₹2,282 crore from ₹2,095 crore in June.

[{"selector":"#anim-bd5b3382-ed86-43b0-8534-695a030b6bed","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-94472e29-ddac-4268-9d26-0db1dcb3da48","keyframes":{"transform":["translate3d(-111.23919%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Provisions increased by 87% from last year and even 73% from the June quarter to ₹1,820.1 crore. Operating profit also declined by 7.2% from last year and nearly 9% sequentially to ₹3,599 crore.