Indusind Net Profit Rises Steep, Price Slide On High Provisioning

IndusInd Bank, private sector lender, has reported a 30 per cent jump in net profit on strong NII, and other income for the quarter ended December 31, 2015.

Its net profit jumped by 30 per cent to Rs 581 crore in the third quarter ended September 30, 2015 from Rs 447.2 crore during the year that went by.

Net interest income accelerated by 36 per cent to Rs 1,173 crore compared to the same period last year, while on a sequential basis it saw a growth of 7 per cent. Its Net Interest Margin (NIM), a key indicator of the bank’s profitability, expanded to 3.91 per cent for the quarter, up by 24 bps compared to 3.67 per cent in same quarter last year. Non-Interest income grew 29.3 per cent at Rs 839 crore as against Rs 649 crore earned in the previous year.

The company’s provisions for bad loans rose by 80.7 per cent to Rs 177 crore compared to Rs 98 crore in the previous year.

On the asset quality front, gross Non-Performing Assets (NPA) for the quarter stood at 0.82 per cent, expanding by 5 bps Q-o-Q and net NPA too increased to 0.33 from 0.31 per cent. In value terms, total gross NPAs have increased from Rs 602.10 crore in the September quarter to Rs 681.13 crore this quarter, an increase of 1.13 per cent. Net NPA has increased 1.14 per cent Q-o-Q to Rs 273.34 crore.

Current and Savings Account (CASA) deposits grew by 28 per cent Y-o-Y to Rs 30,232 crore taking the CASA ratio to 35 per cent as on December 31, 2015, up from 34.1 per cent as on December 31, 2014. Further, SA deposits grew by 24.6 per cent to Rs 16,125 crore from Rs 12,944 crore as on December 31, 2014.

The Capital Adequacy Ratio (as per BASEL III norms) has marginally declined to 16.43 per cent versus 16.52 per cent (Q-o-Q). The Bank delivered RoA of 1.92 per cent for Q3FY16 as against 1.90 per cent in Q3FY15.

Its total advances grew by 29 per cent to Rs 82,167 crore as on December 31, 2015. Corporate banking has accounted for 58.3 per cent of the advances portfolio which grew by 30 per cent. Retail banking (including MSME)/business banking has accounted for 41.7 per cent as on December 31, 2015 which grew by 27 per cent.

Retail banking has grown by 23.8 per cent Y-o-Y at Rs 2045.4 crore in Q3 FY16 as against Rs 1,652.6 crore in Q2 FY15. Wholesale or corporate banking of the bank has grown at 21.5 per cent to Rs 1192.5 crore as against Rs 981.5 crore in the corresponding quarter of the previous year. Treasury segment de-grew by 5.33 per cent to Rs 688.5 crore in Q3FY16.

For nine months ended December 31, 2015, the company’s net profit grew at 28.31 per cent of Rs 1,666.10 crore, whereas NII reported 30 per cent growth of Rs 3,248.36 crore on Y-o-Y basis.

Currently the stock is trading at 3.2 times its adjusted book value of Rs 288 per share. The stock on Tuesday closed at Rs 912.45, down by Rs 25.15 or 2.68 per cent from its previous close of Rs 937.60 on the BSE.