IndusInd Bank is set to deliver a modest July-September quarter (Q2FY25) performance as rising cost of deposits will outpace yield on advances, said analysts. The private lender will release its Q2 scorecard on October 24, 2024.
According to Moneycontrol poll of six brokerage estimates, IndusInd Bank's net interest income is likely to rise by 9 percent year-on-year (YoY) to Rs 5,533 crore in Q2FY25 from Rs 5,077 crore in the year-ago period. The lender's profit-after-tax (PAT) is expected to grow by a modest 4 percent YoY to Rs 2,207 crore in Q2FY25 versus 2,181 crore in Q2FY24.
What factors are driving the earnings?
Healthy loan, deposit growth: Motilal Oswal analysts expect IndusInd Bank to deliver healthy loan and deposit growth in the September quarter. Loans are expected to grow by 15 percent year-on-year (YoY) to Rs 3.6 lakh crore in Q2FY25, while deposits are pegged to rise by 14 percent YoY to Rs 4.1 lakh crore.
Margin moderation: Prabhudas Lilladher analysts expect margins to contract by 21 basis points (bps) YoY to 4.6 percent in Q2FY25 from 4.8 percent in Q2FY24. The rising cost of deposits outpacing yield on advances is expected to subsequently weigh on margins during the quarter.
Worsening asset quality: Prabhudas Lilladher analysts sees IndusInd Bank's asset quality to worsen to 4.6 percent in Q2FY25, as compared to 1.93 percent in the year-ago period. Credit costs are expected to increase by 3 basis points sequentially.
What to look out for in the quarterly show?
Key monitorable would be outlook on loan growth, pace of cost of funds, and asset quality outlook.
In the July-September period, shares of IndusInd Bank slipped 1 percent, underperforming Nifty 50's 1 percent rise.
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