Private banking major IndusInd Bank is likely to report its March quarter earnings on May 22.
Research and broking firm Kotak Institutional Equities expects IndusInd Bank to report net profit at Rs 599.5 crore down 37.1 percent year-on-year (down 39.1 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase by 17.7 percent YoY (up 3.3 percent QoQ) to Rs. 2,363.3 crore.
Pre Provision Profit (PPP) is likely to rise by 3 percent YoY (down 13.9 percent QoQ) to Rs 1,823.1 crore.
Motilal Oswal is of the view that IndusInd Bank is likely to report a net profit of Rs 526.1 crore down 44.8 percent year-on-year (down 46.6 percent quarter-on-quarter). Net Interest Income (NII) is expected to increase by 19.7 percent YoY (up 5.1 percent QoQ) to Rs. 2,403.7 crore while Pre Provision Profit (PPP) is likely to rise by 27.6 percent YoY (up 6.6 percent QoQ) to Rs 2,257.6 crore.
The research firm expects IndusInd Bank to report strong loan growth of ~32 percent YoY in Q4FY19, significantly ahead of system loan growth. Deposit growth should also remain strong at ~22 percent YoY while margins are likely to remain flattish QoQ at ~3.9 percent.
Key issues to watch for
Impact on the CV portfolio, particularly after the slowdown in
Corporate asset quality will be a key monitorable
Provisioning and further developments on the IL&FS exposure
According to Narnolia Financial Advisors, corporate and non-vehicle yield of IndusInd Bank is expected to increase due to hike in MCLR rate, but yield on vehicle finance will be under pressure to fixed-rate yield. However, the research firm expects margins to remain under pressure with the rising cost. NII growth is expected to grow at 21 percent YoY.
Other income is expected to grow at 25 percent YoY. Exposure to IL&FS is Rs 3,000 crore of which Rs 2,000 crore is towards parent company for which the bank has provided provisions of Rs 600 crore. Asset quality is expected to improve with the moderation in slippages ratio at 0.32 percent in Q4FY19. Going forward provision on IL&FS is likely to remain high on 4Q FY19, the report added.
Loan growth is expected at 30 percent YoY while deposit is likely to grow at 24 percent YoY because of an increase in CASA.
Key trackable this quarter
NIM PerformanceSlippages trend