IndusInd Bank (INDUSINDBK) Q2 24/25 earnings summary

Executive summary

• Economic activity remained stable in Q2 FY25, with resilient private consumption, investment demand, and a rebound in government spending and CapEx.

• Net profit declined 40% year-over-year to ₹1,331 crore for Q2 FY25, with operating profit down 8% year-over-year to ₹3,600 crore, despite double-digit loan and deposit growth.

• The bank maintained a diversified loan book (53% retail, 47% wholesale) and a strong distribution network, serving 41 million customers.

• Digital initiatives scaled up, with 93% of transactions digital and significant growth in digital assets and customer acquisition.

• Asset quality remained stable with GNPA at 2.11% and NNPA at 0.64%, and a provision coverage ratio of 70%.

Financial highlights

• Net interest income grew 5% year-over-year to ₹5,347 crore, but was impacted by lower loan yields and slower microfinance growth.

• Net profit for the quarter was ₹1,331 crore; adjusted for contingent provision, profit was ₹1,725 crore.

• Net interest margin moderated to 4.08% from 4.25% quarter-on-quarter due to lower high-yielding asset growth and higher deposit mobilization.

• Operating profit stood at ₹3,600 crore; cost-to-income ratio increased to 52.21% due to slower revenue growth.

• Deposits reached ₹4,12,397 crore (15% YoY, 3% QoQ); retail deposit growth was robust at 16% YoY and 4% QoQ.

Outlook and guidance

• Expectation of improved retail disbursements and asset quality in H2, supported by festive season and economic recovery.

• Management remains cautiously optimistic on loan growth, especially in microfinance and vehicle finance, with a focus on secured lending.

• Credit cost guidance for the year remains at 110-130 basis points, with the recent contingent provision seen as a one-off.

• Margins expected to recover as high-yielding asset growth resumes; current NIM pressure seen as transitory.

• Focus remains on expanding retail deposits, digital banking, and rural outreach, with continued investment in digital platforms and new product launches.