IndusInd Bank Q2 net profit falls 40% on-year to Rs 1,331 crore, hit by provisions, finance costs; misses expectations

IndusInd Bank Q2 FY25 Results

IndusInd Bank's consolidated net profit for Q2 FY25 fell 40 percent on-year to Rs 1,331 crore, widely missing Street expectations, mainly hit by near doubling of loan loss provisions during the quarter. Profit also fell as operating expenses across the board, including finance costs, rose faster than the bank’s income. A Moneycontrol poll of 6 brokerage estimates had pegged the lender's Q2 net profit at Rs 2,207 crore.

The private sector bank's net interest income (NII) grew 5 percent on-year to Rs 5,347 crore during the July-September quarter, below the Moneycontrol estimate of Rs 5,533 crore. Previously, IndusInd Bank had reported a net profit of Rs 2,181 crore and NII of Rs 5,077 crore in the corresponding quarter last year.

The bank’s net interest margin (NIM), a key profitability metric, declined to 4.08 percent from 4.29 percent in the year-ago period.

IndusInd Bank recorded 'provisions and contingencies' worth Rs 1,820 crore during the July-September quarter, which was 87 percent higher than the Rs 974 crore recorded in the same quarter previous year.

Notwithstanding the fall in profit, IndusInd Bank saw healthy loan growth, with total loans rising 13 percent year-on-year to Rs 3.57 lakh crore. Deposits increased 15 percent to Rs 4.12 lakh crore. The bank maintained a robust capital adequacy ratio (CRAR) of 16.51 percent, supported by a Tier 1 capital of 15.21 percent, indicating a strong capital position​, it said.

In terms of asset quality, the gross non-performing asset (GNPA) ratio expanded by 9 basis points on-year to 2.11 percent; while the net NPA ratio expanded 7 bps to 0.64 percent. The bank’s provision coverage ratio (PCR) was 70 percent.