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IndusInd Bank reported an improvement in sequential performance

ICICIdirect Research 23 Jul 2026 DISCLAIMER

News: IndusInd Bank reported an improvement in sequential performance, with business growth returning as advances grew 3.3% QoQ (down 2.2% YoY) to ₹3.26 lakh crore, led by wholesale banking, while deposits increased 3.7% QoQ (up 4.4% YoY) to ₹4.15 lakh crore, supported by healthy retail deposit mobilisation. NII rose 1.0% YoY (7.2% QoQ) to ₹4,685 crore, aided by a ₹284 crore one-off interest recovery on income-tax refund, while reported NIM expanded 18 bps QoQ to 3.57% (normalized NIM at 3.35%, down 4 bps QoQ). PPOP increased 8.0% YoY (20.8% QoQ) to ₹2,774 crore, supported by operating leverage and lower operating expenses. Asset quality continued to improve, with GNPA/NNPA at 3.25%/0.95% (improving 18 bps/5 bps QoQ), while provisions declined 21.3% YoY (6.6% QoQ) to ₹1,384 crore on lower net slippages. Consequently, PAT improved sharply to ₹1,037 crore (71.7% YoY; 74.5% QoQ).

View: Business recovery is gaining traction, with the bank transitioning from balance sheet repair to calibrated growth. Improving retail deposit traction, lower credit cost, normalization in the MFI portfolio and revival in wholesale lending provide confidence on sustainable earnings recovery. However, recovery in vehicle finance growth remains monitorable after relatively subdued traction in Q1FY27. While near-term margin pressure may persist due to a higher wholesale mix, management expects NIMs to improve as the loan mix gradually shifts toward higher-yielding retail, SME and rural segments. The bank reiterated its guidance of credit growth in line with the industry and an exit RoA of ~1% in FY27, supported by operating leverage, improving fee income and continued cost discipline.

Impact: Positive

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