IndusInd Bank's profit after tax (PAT) experienced a significant decline, falling 40% year-on-year and 39% quarter-on-quarter to around INR 13.3 billion. This figure missed estimates after adjusting for a contingent provision of INR 5.25 billion.

The bank's net interest income (NII) grew by 5% year-on-year to INR 53.5 billion, while other income saw a quarter-on-quarter decline of 10.5% to INR 21.85 billion. The net interest margin (NIM) contracted by 17 basis points to 4.08%. The loan book expanded by 13% year-on-year, driven by growth in corporate and commercial segments, and deposits increased by 15% year-on-year, primarily due to a rise in term deposits.

However, fresh slippages rose by 17% quarter-on-quarter to INR 17.9 billion, with the consumer finance sector being the main contributor. The gross non-performing asset (GNPA) and net non-performing asset (NNPA) ratios increased to 2.11% and 0.64%, respectively. Motilal Oswal has revised its earnings estimates downward by 16.7% and 8.7% for FY25 and FY26, projecting a return on assets (RoA) of 1.6% and return on equity (RoE) of 13.6% by FY26. The firm maintains a "BUY" rating with a target price of INR 1,500, based on a valuation of 1.5 times FY26 estimated adjusted book value. Key upcoming events include monitoring asset quality progression and the Reserve Bank of India's approval for the MD and CEO's fresh term.