IndusInd Bank surges 6% on steady operational performance in Q2

In Q2FY22, IndusInd Bank's net profit rose by 73 per cent at Rs 1,147 crore on back of steady increase in net interest incomes and fees.

Shares of IndusInd Bank surged 6.4 per cent to Rs 1,214.90 on the BSE in Thursday’s intra-day trade after the bank posted steady operational performance for the quarter ended September 2021 (Q2FY22), with net interest income (NII) rising by 11.6 per cent year-on-year (YoY) and 2.7 per cent quarter-on-quarter (QoQ) to Rs 3,658 crore on the back of stable margins and sequential pick up in loan growth. Net interest margins (NIMs) for the quarter were stable at 4.07 per cent against 4.06 per cent QoQ.

At 09:28 am; the stock of private sector lender was trading 5.8 per cent higher at Rs 1,208, as compared to 0.42 per cent decline in the S&P BSE Sensex. It had hit a 52-week high of Rs 1,239.40 on October 19, 2021.

In Q2FY22, IndusInd Bank’s net profit rose by 73 per cent at Rs 1,147 crore on back of steady increase in net interest income and fees. The bank has reported a net profit of Rs 663 crore for Q2FY21. Sequentially, it was up 13 per cent from Rs 1,016 crore in Q1FY22.

It's gross Non-Performing Assets (NPAs) ratio was at 2.77 percent on September 30, 2021 up from 2.21 per cent a year ago. Sequentially it was down from 2.88 per cent in June 2021. Net NPA ratio moved up to 0.8 per cent in September 2021 from 0.52 per cent a year ago. However, Net NPAs fell from 0.84 per cent in June 2021. However restructured book increased by 90 bps sequentially to 3.6 per cent.

Business growth gained momentum as loans increased by 4.8 per cent QoQ to Rs 2.2 trillion and deposit growth was healthy at 21 per cent YoY driven by 26 per cent YoY uptick in CASA, ICICI Securities said in a note.

IndusInd Bank reported an in line operating performance, while higher other income drove an earnings beat. Provisions moderated QoQ, despite the bank making additional standard provisions of Rs 980 crore. Loan growth picked up sharply, led by Corporate and MFI/Credit Cards, while the Vehicle book remains muted. Retail disbursements have crossed pre-COVID levels across most segments. Deposit trends continue to remain strong, led by Retail term deposits, Motilal Oswal Securities said in results update.

Asset quality remains stable, with higher slippages offset by a strong recovery and upgrades. Restructuring book too increased to 3.6 per cent against 2.7 per cent in Q1FY22, higher than other peers. However, CE improved to 98 per cent in Sep’21, which, along with a high PCR of around 72 per cent and contingent provisions of 1.4 per cent of loans, provides further comfort on credit cost, the brokerage firm said.