IndusInd Bank Q3 Review - Stable Asset Quality; Restructured Portfolio Moderated To 1.25%: Dolat Capital

Dolat Capital Report

IndusInd Bank Ltd.’s profitability metrics were healthy with net interest income/profit after tax growth of 18%/58% YoY respectively. Return on assets improved to 1.9% and core pre-provision operating profit stood at a strong 3.4%. The bank further utilized Rs 4.6 billion of contingent provisions in Q3.

Headline asset quality metrics were stable QoQ and restructured book moderated to 1.25%. However, non-performing asset ratios across micro finance institution and vehicle portfolios increased sequentially, even with low slippages at 2.2%, partly owing to lower writeoffs/asset sale.

Strengthening growth trends, robust core operating metrics, and reduced asset quality concerns provide a strong base for sustainable RoAs of 1.8%. Management remains focused on improving its liability profile, a monitorable.

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