IndusInd Bank reports a robust 34% growth in Q1 net profit this fiscal amid healthy disbursals and higher exposure to the consumer loans sector than its peers.

IndusInd Bank had charted a standalone net profit of Rs 1,603.3 crore in Q1 of the previous fiscal, up 5% from Rs 2,040.5 crore in Q4FY23.

Analysts expect its net interest income, the difference between interest earned and interest paid will climb 15.6% YoY to Rs 4,770 crore versus Rs 4,125.3 crore in Q1 FY23. The lender’s NII was Rs 4,669.5 crore in the 3 months to March 2023, with net interest margin (NIM) at 4.28%.

IndusInd Bank shares were trading 0.51% up at Rs 1,399.70 on the BSE. The shares are up 14% yearly, while the one-year return was 64%.

In Q1, IndusInd Bank clocked a 21% rise in net advances to Rs 3.01 lakh crore, versus Rs 2.47 lakh crore a year back. On a sequential basis, advances are augmented by 4%.
Deposits grew 15% YoY to Rs 3.47 lakh crore and 3% QoQ. Retail and small business customer deposits amounted to Rs 1.5 lakh crore, versus Rs 1.4 lakh crore in March.

However, the lender’s CASA ratio slipped to 39.9% in Q1, its lowest in 24 quarters, from 43.2% in the year-ago period.
Nuvama Institutional Equities expects the bank’s NIM to be stable QoQ and credit cost to moderate. “In its business, the bank reported healthy loan growth of 3.8% QoQ and deposit growth of 3.2% QoQ.

Experts said healthy credit offtake impetus, stable margins, robust treasury operations and muted credit cost will drive healthy performance of banks across segments in 1Q FY24.

The RBI’s pause on interest rate climbs is positive for lenders on the funds cost front, though the monetary policy remains a key factor to monitor in FY24.