IndusInd Bank Q2 Preview: Profit likely to grow 20% YoY on solid loan growth, stable asset quality

economictimes.indiatimes.com:

IndusInd Bank is likely to have seen another healthy quarter (July-September), led by healthy loan growth and stable net interest margin (NIM).

The bank's net interest income (NII) is expected to grow 16% year-on-year (YoY), while the net profit is seen rising 20% YoY, according to an average estimate of five brokerages.

The lender reported loan and deposit growth of 4% quarter-on-quarter (QoQ) in its business update. On a YoY basis, loan growth stood at 20% during the said quarter.

Analysts expect provisions to decline further in the second quarter, led by lower slippages and better asset-quality trends.

In the first quarter, IndusInd Bank had reported a 32% YoY rise in the net profit at Rs 2,124 crore, while NII rose 18% YoY to Rs 4,867 crore.

Here's what brokerages expect from IndusInd Bank's second-quarter results.

Kotak Securities
We expect an 8% YoY rise in PPOP, led by lower contribution from non-interest income, slower NII growth and higher operating cost growth, led by recovery in business momentum.

NIM (reported) likely to decline 10 bps at 4.2%.

Non-interest income would be subdued due to lower treasury income and other fee income. Deposit growth at 15% YoY is showing stable trends.

We expect RoE at 15% in 2QFY24

Both the MFI and vehicle finance portfolios are showing negligible risk. We are building in slippages of 2% (Rs 1400 crore).

The key focus area would be the cost of funds and the ability to sustain current levels of loan growth.

Motilal Oswal
Expect loan growth to remain healthy; deposit traction would be closely monitored. Expect asset quality to remain broadly stable.

Expect margin to be broadly stable. Credit cost to witness a gradual moderation as PCR remains healthy

Nuvama
We expect