IndusInd Bank Q3 results preview: Profit may climb 45-75% YoY; key things to watch

IndusInd Bank is expected to report a strong set of quarterly numbers, with profit growing 45-75 per cent year-on-year (YoY) while net interest income (NII) is seen rising in excess of 15 per cent, analyst projections suggested. Net interest margin is expected to improve sequentially. Asset quality may improve, analysts said.

Emkay Global expects IndusInd Bank to report a 50.90 per cent year-on-year (YoY) rise in profit at Rs 1,872.80 crore compared with Rs 1,241.40 crore in the same quarter last year. NII is seen rising 17.8 per cent YoY to Rs 4,467.80 crore compared with  Rs 3,793.60 crore in the year-ago quarter. NIM is seen at 4.2 per cent compared with 4.1 per cent in the same quarter last year.

"Healthy growth coupled with stable margins and contained provisions to support profitability. Slippages to remain elevated, given residual stress recognition in CV, MFI book," Emkay Global said.

Sharekhan estimated IndusInd Bank's profit at Rs 1,887 crore. It sees NII growing 17.2 per cent YoY at Rs 4,448 crore. Pre-provision operating profit is seen at Rs 3,614 crore, up 12.8 per cent YoY. This brokerage expect NIM for the bank to decline sequentially and credit costs to witness a gradual moderation. Investors would watch out trends in asset quality & collection efficiency for the MFI segment, demand environment in vehicle portfolio, slippages from restructured book.

IndusInd Bank's business update was healthy but, like in the September quarter, Nuvama is expecting core PPOP and NII growth to be slower than peers. The key trigger for IndusInd Bank from hereon is RBI’s approval for re-appointing the current CEO. The bank has sought a renewal of three years. RBI’s response is expected in January.

This brokerage expects profit at Rs 2,020 crore, up 74 per cent YoY. It sees NIM at 4.24 per cent. NII is seen rising 17.4 per cent to Rs 4,450 crore. Provisions are seen at Rs 1,000 crore while slippages as percentage of lagged loans are seen at at 2.75 per cent.

Prabhudas Lilladher is expecting gross non-performing assets at 2.06 per cent compared with 2.48 per cent in the year-ago quarter. Credit cost is seen at 1.84 per cent against 2.89 per cent YoY. Provisions for the quarter are seen at Rs 1,250 crore compared with Rs 1,654 crore YoY.

Prabhudas Lilladher said IndusInd Bank earnings will be driven by decent loan growth of 16 per cent YoY.

"We expect margins to be stable sequentially. With asset quality improving we expect, provisions to remain range bound," it said.

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