IndusInd Bank share price experienced a significant decline, tumbling 18%. due to weak performance. Provisions and contingencies rose sharply by 87% YoY to ₹1,820 crore, substantially up from ₹974 crore in the same quarter last year, indicating a more cautious fiscal approach.
The bank reported a 39.5% decline in net profit, down to ₹1,331 crore from ₹2,202 crore a year ago. Adjusting for increased contingent provisions, the adjusted net profit for Q2 FY25 would be ₹1,725 crore, still reflecting challenges.
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Asset quality worsened, with gross NPAs increasing to 2.11% from 1.93% year-on-year, and net NPAs also rising from 0.57% to 0.64%. This indicates growing concerns over the bank’s loan book health.
The bank’s capital adequacy ratio declined significantly from 18.21% to 16.51%, highlighting reduced financial resilience. This ratio is crucial for assessing a bank’s capital to risk-weighted assets ratio and overall financial stability.
In terms of earnings, IndusInd Bank’s net interest income (NII) for the quarter grew by 5% YoY to ₹5,347 crore. However, the net interest margin (NIM) decreased to 4.08% from 4.29% in the previous fiscal’s same quarter.
Overall, the Q2 results highlighted several challenges for IndusInd Bank, including higher provisions, deteriorating asset quality, and a dip in capital adequacy, all of which contributed to a significant stock price drop.
