IndusInd Bank Q3 preview: Healthy numbers likely, but higher base to dent sequential growth

IndusInd Bank will release its October-December quarter scorecard on January 14 and most brokerages are of the view that the private sector lender will report healthy sets of numbers but may fall short of its second-quarter performance in terms of profit due to high base.

Brokerage firm Emkay Global expects the bank's growth to be moderate on a high base, while net interest margins (NIMs) are likely to be flat sequentially.

"Slippages will be moderate, with no major account slipping except possibly Omaxe and LRD of Rs 60 crore," Emkay Global said.

Emkay's estimates show IndusInd Bank may report Q3FY20 PAT to the tune of Rs 1,393.8 crore against Rs 9,85 crore reported in Q3FY19, a 41.5 percent YoY change but 0.5 percent lower QoQ.

The bank reported a 52.22 percent year-on-year (YoY) rise in consolidated net profit at Rs 1,400.96 crore for the quarter ended September 30.

The NIM for Q3FY20 may come at 4.1 percent against 3.8 percent in Q3FY19. This is a 30bps YoY and 3bps QoQ rise in NIM.

Emkay Global expects net interest income (NII) to be around Rs 3,010.8 crore in Q3FY20 against Rs 2,288.1 crore in Q3FY19.

Moreover, operating profit can see a 28.2 percent YoY jump to Rs 2,713.4 crore in the December quarter of FY20 against Rs 2,117 crore in the corresponding quarter of the previous financial year.

Brokerage firm Nirmal Bang Securities expects IndusInd Bank's PAT to jump 39.8 percent YoY, coming at Rs 1,376.7 crore in Q3 of FY20. However, sequentially, it is seen as a 1.7 percent decline in PAT.

"NII is likely to see a 30.4 percent YoY and 2.5 percent QoQ growth to Rs 29,82.6 crore while pre-provision profit will see a 23.3 percent YoY gains but 0.5 percent QoQ drop, coming at Rs 2,611 crore for Q3FY20.

Motilal Oswal Financial Services sees a moderate loan growth due to the auto slowdown. Margins, on the other hand, are likely to expand, driven by high-yielding MFI portfolio.

Motilal Oswal expects bank’s net profit at Rs 1,508.7 crore for Q3FY20, up 53.2 percent YoY.

"Operating profit may see a 28.7 percent YoY jump at Rs 2,725.4 crore while NII may jump 30.2 percent YoY to Rs 2,979.7 crore," said Motilal Oswal.

IndusInd Bank numbers are likely to meet market expectations but investors and analysts will also keep a watch on stressed asset resolution, which will reveal much about the bank’s growth outlook.

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