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IndusInd Bank Q2 preview: PAT may grow 23%, but analysts watch out for IL&FS impact

Its net interest income (NII), the difference between interest earned and paid, is likely to be reported at Rs 2,210.3 crore, a rise of 21 percent to Rs 1,820.9 crore, an analysts’ poll conducted by Reuters revealed

October 14, 2018 / 09:20 AM IST
No. 4 | Bank: IndusInd Bank 7.25 percent| Annual rate of interest:  | What Rs 1 lakh grows to in three year: Rs 1,24,055

No. 4 | Bank: IndusInd Bank 7.25 percent| Annual rate of interest: | What Rs 1 lakh grows to in three year: Rs 1,24,055

 
 
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Private sector lender IndusInd Bank is expected to post a  23 percent rise, year-on-year (YoY) in its net profit for the September quarter to Rs 1,081.5, according to an analysts' poll by Reuters. The lender had posted a net profit of Rs 880 crore in the same quarter of last fiscal.

The bank will be declaring its results on October 15, 2018.

Broking firm Motilal Oswal expects profit growth of 46 percent for the quarter as it is building in the merger of the bank with Bharat Financial Inclusion.

Its net interest income (NII), the difference between interest earned and paid, is likely to be reported at Rs 2,210.3 crore, a rise of 21 percent from Rs 1,820.9 crore, the Reuters poll said.

Global research firm Morgan Stanley and Motilal Oswal expect strong and stable loan growth at 29 percent for the bank.

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Motilal Oswal expects deposit growth to be strong at 18 percent YoY. “Continued market share gains in vehicle finance would remain a key factor to monitor," it said.

It also expects non-interest income to grow 7 percent YoY, supported by healthy fee income growth. “Stronger contribution of third-party distribution fees owing to increased inflows into mutual funds (MFs) and insurance industry will offset lower treasury gains,” the report further stated.

Meanwhile, Morgan Stanley expects core fees to be strong at 23 percent YoY and with continued cost optimization, core PPoP (pre-provisioning operating profit) growth of 28 percent YoY.

It lists some key things to watch out in its results.

-Guidance on loan growth, particularly in the retail segment.

-Margin outlook amid higher rates, rising competition in retail.

-Asset quality considering the potential impact of IL&FS crisis and quality of NBFC exposure.

-Progress on the Bharat Financial merger.

The stock has fallen over 9.5 percent in the past one month, while in the past three days, it gained around a percent. At the close of market hours on Friday, the stock was quoting at Rs 1,651.35, up Rs 59.05, or 3.71 percent, on the BSE.
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