IndusInd Bank shares rose over 2% on Monday, 26 October, after the private sector lender reported a return to profitability in the September quarter, supported by steady core income growth and an improvement in asset quality. However, a sequential contraction in net interest margin (NIM) and a cautious recovery outlook have left brokerages divided on the stock.
The bank reported a net profit of ₹1,242 crore in Q2 FY27, compared with a net loss of ₹437 crore in the year-ago quarter. Profit after tax rose 20% from ₹1,037 crore in the June quarter.
Net interest income (NII), or the difference between interest earned and interest paid, increased 4% year-on-year to ₹4,569 crore, although it declined 2% sequentially. Net interest margin contracted to 3.23% from 3.35% in the preceding quarter, adjusted for a one-off item, according to the bank's disclosures.
Advances grew 11% quarter-on-quarter, while asset quality improved. The gross non-performing asset (GNPA) ratio declined to 2.73% from 3.25% in the June quarter. Provisions stood at ₹1,223 crore, down 12% sequentially and 54% year-on-year.
IndusInd Bank Managing Director and CEO Rajiv Anand said the bank mobilised $3.51 billion through FCNR(B) deposits during the quarter, which weighed on margins. The bank used part of these funds to replace higher-cost wholesale borrowings and plans to deploy the remaining liquidity towards advances as required.