Markets have a rethink on IndusInd Bank

Post the Q3 performance declared yesterday, IndusInd Bank had tanked but today, the market seems to be having a rethink and the stock is currently the top gainer on the bourses. The stock price is up currently over 2.5% at Rs.935 and this is after the stock rose 3.5% to an intra day high at Rs.944.

The performance is a mixed bag. Though on profitability terms, it exceeded most expectations, the higher provisioning and taxation caused anxiety. Net Profit for the quarter was Rs. 581 crore, up 30% (YoY). Net Interest Income (NII) at Rs.1,173 crore grew 36% while non NII rose 29% at Rs.839 crore. Net Interest Margin for the current quarter was at 3.91% as against 3.67 % in the Q3 FY15 and 3.88% sequentially. In terms of business, advances rose 29% while deposits were up 25%. The good news here is that its 9MFY16 net profit at Rs.1667 crore is already 93% of FY15 net profit; with one more quarter to go clearly it will end FY16 on a much better note, at least on profitability terms.

Provisions were at Rs.177 crore – up by a huge 81% (YoY) and up 12% (QoQ). Tax outgo for the quarter came in at Rs.303 crore, up 32% (YoY).

Coming to asset quality, it was stable. Gross NPA for the quarter was up from 0.77% to 0.82% (QoQ) and Net NPA rose from 0.31% to 0.33%. RoA also remained stable at 1.92 v/s 1.93% (QoQ).