IndusInd Bank returns to profit with ₹1,242 crore in Q2

Bank Limited (INDUSINDBK) will be in focus when markets open on Monday, October 26, after it reported a Q2 FY27 consolidated net profit of ₹1,242 crore against a loss of ₹437 crore a year ago. The results came out after market hours on Friday, October 23, when the stock closed 1.76% lower at ₹835. Profit rose 51% sequentially from ₹824 crore in Q1. Operating profit grew 40% to ₹2,874 crore, and fee and other income jumped to ₹2,248 crore from ₹1,651 crore. Gross NPA improved to 2.73% from 3.60% a year ago, and net NPA to 0.83% from 1.04%. Advances grew 11% to ₹3.63 lakh crore, and deposits rose 10% to ₹4.29 lakh crore. The clean-up after last year's troubles is showing. Gross slippages fell to ₹1,460 crore from ₹2,537 crore a year earlier, so fewer loans are turning bad. CEO Rajiv Anand plans to add about 100 branches in the second half, which signals a shift from repair to growth. The core lending business is still weak. Net interest income grew only 3.62% to ₹4,569 crore, far slower than 11% loan growth. Net interest margin fell to 3.23% from 3.32% a year ago. Most of the profit recovery came from lower provisions and higher other income, not from lending margins. The provision coverage ratio also slipped to 70.19% from 71.81%, and part of the deposit growth came from $3.51 billion of FCNR(B) deposits. Investors should watch net interest margin trends, net interest income growth, slippages in the microfinance and vehicle books, and deposit growth beyond FCNR inflows. The key question is whether IndusInd can lift core earnings, not just profit, once provisions stop falling. Disclosure: I do not hold any position in IndusInd Bank Limited. This post is for informational purposes only and is not investment advice.