IndusInd Bank shares plunge 5% despite strong Q2

Shares of IndusInd Bank plunged 5.5% to hit an intra-day low of ₹1,150 despite the bank registering strong growth in its top and bottom line growth. The private lender's net profit grew by 15% to ₹1,805 crore in the July to September quarter from ₹1,147 crore in the same period last year. 

The bank’s pre-provision operating profit (PPOP) surged 10% to ₹3,544 crore in the September quarter this year, compared to ₹3,222 crore last year. The company’s net income surged 9% to ₹10,719.20 crore in the September quarter this year, compared to ₹9,791 crore in the year-ago period. 

The bank’s net interest income advanced 18% to ₹4,302 crore on a year-on-year (YoY) basis, compared to ₹3,658 crore in the same period last year. The bank’s operating performance improved led by strong net interest margin (NIM), non-performing assets (NPA), Provision Coverage Ratio, Capital Adequacy Ratio (CRAR) and Current account saving account (CASA). 

The bank’s gross non-performing asset (NPA) declined to 2.11% from 2.77% on a YoY basis, whereas its net NPA ratios improved to 0.61% from 0.80% YoY. For the September-ended quarter, while the bank’s PCR stood at 72%, its CRAR stood at 18.01%. 

The bank’s balance sheet witnessed a growth of 12% at ₹4,26,575 crores in the September quarter, as against the ₹3,80,495 crores in the year-ago period. The bank’s CASA deposits surged 42% to ₹1 ,33,525 crore with Current Account deposits at ₹44, 157 crore and Savings Account deposits at ₹89,368 crore.

Sumant Kathpalia, Managing Director & CEO, Induslnd Bank said, "Indian economy continues to be amongst the best performing economies even in the wake of external disturbances and tightening monetary conditions. During the quarter, the Bank saw consistent improvement across our key business units both in terms of growth and asset quality. Our deposits grew by 15% whereas loans grew by 18% YoY.”

“The loan growth was broad-based across consumer and corporate portfolios. Our operating profit margins continue to be amongst the best in the industry supported by NIM expanding to 4.24% from 4.21% quarter-on-quarter (QoQ). Our GNPAs and NNPAs reduced QoQ from 2.35% to 2.11% and 0.67% to 0.61% respectively driven by a meaningful reduction in slippages.Consequently, our Profit After Tax was at ₹1,805 crores growing 11% QoQ and 57% YoY. Our Capital Adequacy Ratio at 18.01 % is well above the regulatory requirements. The Bank continues to invest in its physical and digital distribution to maintain the growth trajectory as per our strategic ambitions,” he added.