IndusInd Bank posts 1,242 crore rupees profit as provisions fall and asset quality improves
Key Facts
IndusInd Bank reported consolidated net profit of 1,242 crore rupees in the second quarter of fiscal 2027, compared with a loss of 437 crore rupees in the same period a year earlier. The board approved the results at a meeting in Mumbai on 23 October 2026, for the quarter and half-year ended 30 September. Reuters reported that profit exceeded analysts’ estimates of 9.65 billion rupees, with profit at 11.76 billion rupees on the agency’s reporting basis. Profit also rose 51% from the previous quarter, which recorded adjusted profit of 824 crore rupees. Managing Director and Chief Executive Rajiv Anand said, "Profitability has improved, and asset-quality trends remain encouraging."
Operating revenue improved, with net revenue rising to 6,817 crore rupees from 6,060 crore a year earlier. Pre-provision operating profit rose to 2,874 crore rupees, compared with 2,047 crore in the year-earlier quarter. Net interest income was 4,569 crore rupees, versus 4,409 crore, while fee income and other revenue increased to 2,248 crore from 1,651 crore. Net interest margin, however, fell to 3.23% from 3.32% a year earlier. The bank said growth had strengthened and profitability had improved, citing increased traction in retail business and an improved liability base as it sought to rebuild momentum.
The return to profitability coincided with a decline in provisions and contingencies, excluding tax, to 1,223 crore rupees from 2,631 crore a year earlier. Gross non-performing assets to total advances, a measure of bad loans before provisions, stood at 2.73% on 30 September, down from 3.25% on 30 June 2026. Net non-performing assets also fell to 0.83% from 0.95% over the same period. Net profit for the first half of fiscal 2027 was about 2,279 crore rupees, compared with 167 crore in the corresponding half of the previous year. Anand said asset-quality indicators "remain encouraging," pointing to the improvement shown in the quarterly ratios.
These indicators came alongside declines in some funding and capital measures year on year. The average liquidity coverage ratio was 127% in the second quarter, compared with 132% in the year-earlier quarter. Capital adequacy was 16.59% on 30 September 2026, compared with 17.10% on 30 September 2025. For foreign-currency funding, the bank raised $3.51 billion in FCNR (B) deposits through the swap facility as of 31 August 2026. Loans outstanding from the GIFT City branch against those deposits were $1.73 billion on 30 September.
Margin pressure remained one of the main challenges accompanying the results. Net interest margin fell 12 basis points quarter on quarter to 3.23%, as the cost of raising foreign-currency deposits increased and deployment of funds was delayed. Reuters said a recovery was expected in the next quarter as those funds were used for lending. Management also expects to make up for the 12-basis-point margin compression over the next two quarters, supported by retail-business growth and improved liability management. It maintained its return-on-assets guidance at around 1% at the end of fiscal 2027.
The share price on results day did not reflect the improvement in net profit: it closed at 835 rupees on 23 October, down 15 rupees, or 1.76%. The close followed the results announcement on Friday after market hours. The bank put profit at 1,242 crore rupees, while Reuters reported 11.76 billion rupees, against analysts’ estimates of 9.65 billion rupees. Investors will focus next quarter on the deployment of foreign-currency deposits and whether that enables a margin recovery, while tracking retail growth and liability management. Management expects to recover 12 basis points of the margin compression over the next two quarters, while keeping return-on-assets guidance at around 1% at fiscal year-end.