IndusInd Bank Q1 Results Preview: Private lender likely to report strong earnings, profit may surge up to 66% YoY

IndusInd Bank Q1 Results Preview: Private sector lender IndusInd Bank is likely to report robust earnings in the first quarter of the financial year (Q1FY23) on Wednesday, as both the top and bottom lines of the bank to soar in double-digit during the quarter, while asset quality is set to improve, several brokerages believe. 

The highest in expectations, ShareKhan sees the private bank’s profit for the June-end quarter may surge over 66 per cent to Rs 1,619 crore, followed by YES Securities, which sees profit growing over 61 per cent in Q1FY23 to Rs 1,574.9 crore,  

While Motilal Oswal expects the bank’s profit may come at Rs 1470 crore, up around 48 per cent year-on-year and Equirus Securities see profit at Rs 1,443.9 crore, up over 42 per cent YoY. 

In terms of net interest income, all the four brokerage houses believe it would grow between 18-14 per cent YoY during the June-end quarter on Wednesday. 

YES Securities in its preview commentary said, “Sequential loan growth would be moderate due to idiosyncratic aspects and the bank bouncing back from the impact of the third wave of Covid-19 in 4QFY22, which would somewhat offset the seasonal impact of a tepid first quarter of FY23.” 

Similarly, sequential NII growth would be particularly healthy given yield on advances would have evolved higher faster than the cost of deposits due to repricing of externally benchmarked loans, implying NIM expansion on a sequential basis, the brokerage further stated. 

Motilal expects loan growth to see a healthy pickup and deposit traction to remain stable and also estimates asset quality to remain under watch. It added, MFI slippages and restructuring book to be key monitorable. 

The brokerage expects the margin to remain stable at around 4.2 per cent and credit costs to witness a gradual moderation as the focus remains on maintaining higher PCR. 

Similarly, Equirus Securities sees NIMs (net interest margins) likely to remain flattish sequentially, and deposit growth to remain at around 3 per cent. Key things to Look For: Trends in collections in VF/MFI, comments on the MFI portfolio trends, Segments where growth revival is seen and outlook on VF business growth, it added. 

The banking sector is expected to report steady performance in Q1FY23E led by healthy loan growth and controlled credit costs, ShareKhan pointed out. It added, that the banks are likely to report healthy growth in advances with large private banks continuing to gain market share.  

NII growth is likely to be higher and margins would remain stable sequentially, banks exhibiting pricing power in terms of repricing of assets & liabilities which happened in May-June, and having a higher share of floating rate loans are expected to clock higher NII growth and margins, it added.