IndusInd Bank Q2 Results: Profit Rises 22% On Higher Core Income, Lower Provisions
The private lender's net profit rose 22% year-on-year to Rs 2,202.2 crore in Q2 FY24, in line with analysts' estimates.
IndusInd Bank Ltd.'s profit rose in the second quarter, meeting analysts' estimates.
The private lender's net profit rose 22% year-on-year to Rs 2,202.2 crore in the quarter ended September, according to an exchange filing. Analysts polled by Bloomberg estimated a net profit of Rs 2,239.7 crore for the July–September quarter.
Growth outlook for Q3 remains reasonably strong with festive demand driving growth in cars and two-wheeler loans, said Sumant Kathpalia, managing director and chief executive officer of IndusInd Bank, in a call with reporters after the earnings release.
The bank saw healthy growth in vehicle and microfinance business, and noted 18% growth in the corporate book driven by small corporates, he said.
The lender's net interest income, or core income, rose 18% from last year to Rs 5,076.7 crore in the quarter. Other income increased 13.5% year-on-year to Rs 2,281.9 crore.
Net interest margin for the quarter stood at 4.29%, up 5 basis points against 4.24% for Q2 FY23.
The bank's NIMs continue to be range-bound between 4.2% to 4.3%, and their target is set for these levels, Kathpalia said.
Asset quality for the lender remained stable, with the gross non-performing asset ratio falling 1 basis point sequentially to 1.93% as of Sept. 30. The net NPA ratio, too, was stable, with a 1 bps decline quarter-on-quarter to 0.57%.
The bank reported slippages of Rs 1,465 crore, of which Rs 214 crore came in from the corporate book. This was largely led by one corporate account of Rs 158 crore which moved to NPA, Kathpalia said. On a sequential basis, slippages were up 6.7% this quarter.
The provision coverage for the quarter remained unchanged sequentially at 71%.
The cost of funds rose by 101 basis points to 5.40%, as against 4.41% for the corresponding quarter of the previous year. Operating expenses rose 25% year-on-year for the quarter to Rs 3,450 crore.
The current account savings account ratio for the bank was 39% for the quarter ended September, as compared with 42% in the same quarter last year.
The CEO expects the CASA ratio to revive in the next two to three quarters. The cost-to-income ratio will remain elevated in the next one-two quarters, he said.
Provisions for the quarter fell 14.7% from a year ago to Rs 973.8 crore.
The capital adequacy ratio as of Sept. 30 stood at 18.21%, as compared with 18.01% in the same period a year ago.
Commenting on fundraising prospects, Kathpalia said that internal accruals are sufficient to raise capital, and they don't see any need to raise funds in the near term.