IndusInd Bank Q1 Preview: PAT May Drop Up to 91% YoY on Derivative Loss, MFI Risks

is expected to report a sharp decline in net profit for Q1 FY26, with analysts projecting a 70–91% year-on-year drop. The anticipated PAT ranges between ₹194 crore and ₹740 crore, down from ₹2,171 crore last year. This decline follows a weak Q4 marred by a derivative-linked loss and accounting corrections. Net interest income (NII) may fall 22–25% YoY, though margins could see some sequential recovery. Pre-provision operating profit (PPoP) is likely to decline 23–39% YoY due to slower loan growth and muted fee income. Key pressure points include high provisioning—estimated at ₹1,600–1,700 crore—mainly from the microfinance segment. Credit cost is expected to hover around 2%. Asset quality remains under scrutiny, especially with possible slippages in the retail and MFI book. Loan growth may moderate or turn negative, and deposits are likely to be flat. Investor attention will also be on management’s commentary around legacy derivative exposures, succession planning, and steps taken to rebuild trust post the Q4 accounting scandal. The bank reported a net loss of ₹2,329 crore in Q4 FY25, citing employee-linked fraud and inadequate controls, triggering regulatory probes and leadership changes. While the worst may be over, confidence in the bank’s recovery hinges on its ability to improve profitability, asset quality, and governance. Source: The Economic Times No Recommendations