IndusInd Bank is expected to report strong growth in its net profit for the quarter ended March aided by a sharp drop in provisions and improvement in loan growth.
The private sector lender is expected to report 101 percent year-on-year growth in net profit to Rs 1,762 crore, according to an average of estimates from seven brokerages polled by Moneycontrol.
The rise in bottomline will be largely be supported by a sharp decline in provisions to Rs 1,050 crore from Rs 1,865.7 crore a year ago.
IndusInd Bank will report earnings on April 29.
Net interest income is also likely to be sturdy in the wake of double-digit growth in loans as it is seen growing 12.4 percent to Rs 3,973 crore, according to the poll.
Loan growth will be around 13 percent year on year and five percent on a sequential basis. “Disbursements are reaching pre-virus levels in most retail products,” ICICI Securities said in a preview note.
That said, Kotak Institutional Equities expects topline to be dented by subdued non-interest income due to lower treasury income.
IndusInd Bank is expected to see an improvement in asset quality as gross non-performing assets ratio drops to 2.3 from 2.5 percent in the previous quarter while net NPA ratio remains flat at 0.7 percent.
The operating performance will be muted as analysts expect pre-provision operating profits to grow merely 5.8 percent year on year to Rs 3,239 crore. “We expect muted operating profit growth led by weak revenue growth and elevated costs,” Kotak Institutional Equities said. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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