IndusInd Bank dips 6% on profit booking post September quarter results

The bank reported a healthy 57 per cent YoY growth in July-September standalone net profit to Rs 1,805 crore driven by a healthy rise in loan disbursement and net interest income.

Shares of IndusInd Bank dipped 6 per cent to Rs 1,150 on the BSE in Thursday’s intra-day trade on profit booking after the bank reported a healthy 57 per cent year-on-year (YoY) growth in July-September (Q2FY23) standalone net profit to Rs 1,805 crore driven by a healthy rise in loan disbursement and net interest income. On a sequential basis, the private sector bank’s net profit registered an 11 per cent increase from Rs 1,631 crore in the April-June (Q1FY22).

At 09:23 AM, IndusInd Bank traded 3.5 per cent lower at Rs 1,175, as compared to 0.36 per cent decline in the S&P BSE Sensex. Despite today’s decline, in the past three months, the stock has outperformed the market surging 35 per cent, as compared to 7.6 per cent rise in the benchmark index.

In the second quarter of the current financial year, IndusInd Bank’s net interest income, or the difference between interest earned and interest expended, rose 18 per cent YoY and 4 per cent quarter-on-quarter (QoQ) to Rs 4,302 crore. The bank’s net interest margin was at 4.24 per cent, up 17 bps YoY and 3 bps QoQ.

Asset quality of the bank has improved with the Gross NPA and Net NPA ratios improved to 2.11 per cent and 0.61 per cent from 2.77 per cent and 0.80 per cent YoY respectively and PCR at 72 per cent as at Q2FY23.

The bank’s loan book quality remains stable at 18 per cent YoY with traction in Corporate as well as Consumer Finance book. Sequential growth of 6.4 per cent in corporate was driven by working capital loans. Within consumer, growth was broad based barring micro-finance (MFI). However, growth in MFI book should also pick up as disruption due to regulatory changes has been fully addressed, Motilal Oswal Financial Services said in the result update.

IndusInd Bank’s operating performance remains on track led by healthy NII growth and controlled provisions. Asset quality ratios improved driven by lower slippages in corporate as well as consumer portfolios. Thus, outlook for credit cost remains controlled. The management is guiding for continued momentum in loan growth and is looking to end FY23 with a growth of 20 per cent. Healthy provisioning in the MFI portfolio and contingent provisioning buffer of 1.0 per cent of loans will enable a steep decline in credit cost, thus driving a sharp recovery in earnings, the brokerage firm said.