Private sector lender IndusInd Bank plunges 15% to hit intra-day low of Rs 1088.05 on NSE after posting its Q2 FY25 earnings, with a notable 39% year-over-year (YoY) decline in net profit. The bank’s latest results, released Thursday, also show moderate growth in net interest income (NII) but miss market profit expectations.
Net Profit Falls Short of Street Estimates
IndusInd Bank reported a net profit of Rs 1,325 crore for the September quarter, significantly below analysts’ expectations of Rs 2,138 crore. This figure also reflects a sharp decline from the Rs 2,181.47 crore profit recorded in Q2 FY24.
NII Growth and Margin Contraction
The bank’s net interest income increased by 5% YoY to Rs 5,347 crore. However, the net interest margin (NIM) was reported at 4.08%, a 21 basis point (bps) drop from the 4.29% margin in the same period last year and an 18 bps decline on a quarter-on-quarter (QoQ) basis.
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Strong Growth in Deposits and CASA Ratios
IndusInd’s deposits surpassed the Rs 4 lakh crore mark, reaching Rs 4,12,317 crore, which represents a 15% YoY increase from Rs 3,59,548 crore. The bank’s CASA deposits rose to Rs 1,47,944 crore.
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This included Rs 52,606 crore in current account deposits and Rs 95,338 crore in savings deposits, comprising 35.87% of total deposits as of September 30, 2024.
Gross and Net NPA Ratios Show Mild Deterioration
The bank’s gross non-performing asset (NPA) ratio increased to 2.11%, up from 1.93% YoY, while the net NPA ratio rose to 0.64%, up from 0.57% in the previous year’s corresponding quarter.
Provisions and Provision Coverage Ratio
Provisions and contingencies for Q2 FY25 amounted to Rs 1,820 crore, a significant increase from Rs 974 crore in the year-ago period. The Provision Coverage Ratio (PCR) remained consistent at 70% as of September 30, 2024.
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