IndusInd Bank Q1 Preview: PAT may rise 29% YoY on strong loan book, stable asset quality

economictimes.indiatimes.com:

IndusInd Bank is seen reporting strong double-digit growth in net profit for the quarter ended June on the back of a healthy loan book, lower provision, stable asset quality and profitability. According to an ET Now poll, the net profit is seen rising nearly 29% year-on-year (YoY) to Rs 2,100 crore. Net interest income — the difference between interest earned and interest expended — is expected to grow about 18% YoY to Rs 4,850 crore.

Led by healthy income growth, the operating profit before provisions is expected to rise by over 12% YoY to Rs 3,850 crore. The Hinduja Group firm is scheduled to release its earnings on Tuesday. Ahead of the earnings, shares of the bank ended nearly 1% higher at Rs 1,390.50 in trade on Monday.Here is a summary of brokerage expectations from the lender’s results:Kotak Institutional Equities Expect a 5% YoY rise in PPoP, led by lower contribution from non-interest income.

Loan growth is healthy at 20% YoY, while NIM (reported) is likely to be stable at 4%. Non-interest income would be subdued due to lower treasury income and other fee income. Deposit growth at 15% YoY shows stable trends.

Expect provisions to keep declining, led by lower slippages and better asset quality trends. Both the MFI and vehicle finance portfolio is showing improving trends. Building in slippages of 2.2% (Rs 16 billion).

The key focus area would be the cost of funds given the sharp rise in raising deposits and ability to sustain current levels of loan growth.Prabhudas LilladherLoan growth is likely to be superior to industry at 3.8% QoQ, which could drive NII growth of 1.5%. Margin contraction likely to be lower at 3 bps QoQ due to higher share of fixed rate loans. GNPAs could rise by 5 bps QoQ to 2.03%.