IndusInd Bank shares end 1% lower post stable Q1 earnings, analysts maintain positive stance

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IndusInd Bank share price ended 1 percent lower as profit booking dragged the stock. The bank reported stable earnings for the quarter ended June 2018.

The private sector lender has reported a net profit of Rs 1,035.7 crore for the June quarter, a growth of 24 percent compared to Rs 836.5 crore reported in same period last year.

Net interest income, the difference between interest earned and interest expended, grew by 20 percent to Rs 2,122.4 crore.

Analysts said quarterly numbers were in line with stable asset quality.

"We have maintained positive stance on the stock. Valuation premium will continue with stable asset quality," Siddharth Purohit of SMC Institutional Equities said in an interview to CNBC-TV18.

He further said consumer lending business of the bank is very strong and even return on equity (ROE) remained strong. "So we are not worried about valuations."

Lalitabh Shrivastawa of Sharekhan said IndusInd Bank has been consistent performance in the private sector. "I believe overall trajectory of asset quality and loan growth, and 18 percent ROE should not be difficult for the bank to maintain. We maintained positive stance on the stock."

"IndusInd is among our top picks and the quarterly numbers are in line," R Sreesankar, Prabhudas Lilladher said.

On the asset quality front, the net non-performing assets (NPAs) ratio has been unchanged at 0.51 percent quarter on quarter in Q1 while gross NPAs were lower at 1.15 percent against 1.17 percent QoQ.

On the absolute front, net NPA in June quarter inched up to Rs 762.3 crore against Rs 745.7 crore and gross NPAs rose to Rs 1,740.6 crore against Rs 1,705 crore on sequential basis.

Provisions for bad loans remained at elevated levels, rising Rs 350 crore during quarter from Rs 310 crore in same period last year and Rs 335.5 crore in previous quarter.

At 13:30 hours IST, the stock price was quoting at Rs 1,951.35, down Rs 3.25, or 0.17 percent on the BSE.