IndusInd Bank is expected to report 23-33 per cent jump in net profit for the June quarter on a 15-20 per cent rise in net interest income (NII). Analysts expects NIM to come in marginally lower on a sequential basis. Credit costs and asset quality is expected to remain stable. All eyes would be on the outlook on retail deposit mobilisation.
Elara Securities said the bank’s provisional business numbers indicate strong growth momentum – loan growth of 21 per cent YoY (3.8 per cent QoQ) and deposit growth of 14.6 per cent YoY (3.2 per cent QoQ). The strong business tailwinds in the MFI segment and the vehicular finance portfolio could be key growth drivers, it said.
"Given loan book orientation (skewed to a fixed rate book), we expect NIM to fare better than peers. Asset quality volatility has been cause for concern. We expect stress to moderate with no incremental pressure points. Credit cost trajectory would be contingent on the bank’s utilisation of contingency buffer. We expect management commentary on growth outlook, deposit mobilisation and credit cost normalisation to dominate discussions," the brokerage said.
Sharekhan expects IndusInd Bank to report 31.3 per cent YoY surge in net profit at Rs 2,105 crore compared with Rs 1,603 crore in the same quarter last year. NII is seen rising 17.4 per cent YoY to Rs 4,844 crore from Rs 4,125 crore in the corresponding quarter of last year. Pre-provision operating profit may rise 14.1 per cent YoY to Rs 3,871 crore from Rs 3,394 crore, the brokerage said.
Motilal Oswal expects IndusInd Bank to report 33.5 per cent YoY rise in profit at Rs 2,180 crore. It sees NII rising 18.4 per cent YoY to Rs 4,880 crore. It expects asset quality and slippages to improve further given normalisation in MFI and CV businesses and sees credit cost to witness a gradual moderation as PCR remains healthy. Gross NPA as percentage of gross advances is seen at 1.9 per cent against 2 per cent in March and 2.4 per cent in the year-ago quarter.
Elara's profit estimate stands at Rs 2027 crore and NII at Rs 4,932.20 crore.
IndusInd Bank shares are up 13.52 per cent year-to-date compared with a 5.2 per cent rise in the Nifty Bank during the same period. The stock has an average share price target of Rs 1,461, as per Trendlyne, which suggests a 5 per cent upside potential ahead.
"We expect a 5 per cent YoY rise in PPOP led by lower contribution from non-interest income and higher operating costs growth led by recovery in business momentum. Loan growth is healthy at 20 per cent YoY while NIM (reported) is likely to be stable at 4 per cent. Non-interest income would be subdued due to lower treasury income and other fee income. Deposit growth at 15 per cent YoY is showing stable trends. We see RoE at 15 per cent in 1QFY24," said Kotak Institutional Equities.
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