IndusInd Bank: High provisioning to weigh on profits in second half too

Healthy topline growth, as well as operational parameters, are positives

Exposure to the IL&FS group had hurt the sentiment of IndusInd Bank's investors after the latter’s September 2018 quarter (Q2) results announced in October. In Q2, the bank’s net profit grew by a meagre five per cent year-on-year to Rs 9.2 billion due to doubling of provisioning to Rs 5.9 billion, of which about 47 per cent or Rs 2.8 billion was towards exposure to IL&FS.

However, analysts still believe that the provision pain is likely to continue in October 2018-March 2019 (H2FY19). And this may further weigh on near-term sentiment.

Post its interaction with IndusInd’s management, Equirus in