IndusInd Bank's micro loans grew 8% QoQ after ~8 quarters of decline, vehicle finance crossed Rs 1 trillion with disbursements +17% YoY, consumer loans ex-FCNR(B) grew 7% QoQ, and commercial and mid-market grew 13% QoQ. The bank raised $3.51 billion under the RBI swap window, with Rs 16,564 crore of FCNR(B)-linked advances; proceeds replaced high-cost funding, reducing CDs to 3.3% of deposits vs 5.9%, while CASA declined to 27.9% vs 29.4% QoQ.
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IDBI Captial Report
IndusInd Bank delivered a strong Q2 FY27, with growth revival, lower credit costs and improved profitability despite FCNR(B)-led margin pressure.
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Advances grew 11% YoY/11% QoQ to Rs 3.63 trillion, while deposits rose 10% YoY/3% QoQ to Rs 4.29 trillion. Average advances grew 6% QoQ excluding FCNR(B)-linked loans and 9% including them.
Net interest income increased 4% YoY to 4,569 crore, while net interest margin declined 12bps QoQ to 3.23% from normalised 3.35% (excluding one-offs), with FCNR(B) impacting 7–8 bps.
Other income rose 36% YoY/26% QoQ to Rs 2,240 crore, while pre-provision operating profit grew 37% YoY to Rs 2,770 crore.
Provisions declined 54% YoY/9% QoQ to Rs 1,216 crore, reducing credit cost to 1.40% vs 1.74% in Q1.
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PAT stood at Rs 1,176 crore vs a loss of Rs 444 crore in Q2 FY26 and normalised PAT of Rs 1,002 crore in Q1.
RoA improved to 0.87%, RoE to 7.37%, while gross non-performing asset/net non-performing asset improved to 2.73%/0.83%.
The brokeage has maintained a Buy rating with a target price of Rs 960, valuing the bank at 0.9x FY28E price/book-value.
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