Why This Large Cap Lender Is Gaining Nearly 3% After Q2 Print

IndusInd Bank’s share price gained on Thursday after its profit rose in the second quarter, meeting analysts’ estimates. 

What Happened: The private lender’s net profit rose 22% to ₹2,202.2 crore in the quarter ended September, according to an exchange filing. Analysts had estimated a net profit of ₹2,239.7 crore for the July–September quarter.

Growth outlook for the third quarter remains reasonably strong with festive demand driving growth in cars and two-wheeler loans, said Sumant Kathpalia, managing director and CEO of IndusInd Bank, in a call with reporters after the earnings release.

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The lender’s net interest income, or core income, rose 18% from last year to ₹5,076.7 crore in the quarter. Net interest margin for the quarter stood at 4.29%, up 5 basis points against 4.24% a year ago.

The Nitty Gritty: The bank’s net interest margin continues 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 non-performing asset ratio, too, was stable, with a 1 basis point decline quarter-on-quarter to 0.57%.

The provision coverage for the quarter remained unchanged sequentially at 71%.

The current account savings account (CASA) 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.

Price Action: IndusInd Bank’s share price was up 2.62% at ₹1,457.55 in morning trade on Thursday.

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