IndusInd Bank Q1 Preview: Derivative loss overhang to weigh on NII, profit; margins to compress further

The private lender is expected to see net interest margins at 3.1 percent in Q1FY26

IndusInd Bank is set to report muted April-June quarter (Q1FY26) but fewer surprises than previous quarter that was hit by losses in its derivatives segment, said analysts. The private lender will report its Q1 performance on July 28, 2025.

According to Moneycontrol's poll, IndusInd Bank's net interest income (NII) is seen at Rs 4,279 crore in Q1FY26 from Rs 5,407 crore in the year-ago period. Profit is pegged at Rs 559 crore in Q1FY26 from Rs 724 crore in the year-ago period.

Estimates of analysts polled by Moneycontrol are shown to be in a narrow range, meaning any positive or negative surprises may elicit a sharp reaction in the stock price. Among the brokerages polled, JM Financial rolled out the most bullish projections while Nomura forecasted the slowest growth for IndusInd Bank.

What factors are driving the earnings?

Margin compression: The private lender is expected to see net interest margins at 3.1 percent in Q1FY26 versus 4.1 percent in the year-ago period, said analysts at Kotak Institutional.

Deteriorating asset quality: According to Motilal Oswal analysts, IndusInd Bank's net NPA is expected to stand at 1 percent in Q1FY26 from 0.6 percent in the year-ago period.

Slower loan, deposit growth: Loan growth is expected to remain sluggish, declining by 3.6 percent YoY in Q1FY26, whereas deposit growth is expected to be flat YoY, said analysts at Motilal Oswal.

What to look out for in the quarterly show?

Investors and market analysts will watch out for IndusInd Bank's credit costs trend, deposit mobilisation, situation at the bank after the recent episode of derivative accounting, and MFI portfolio.

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