IndusInd Bank posted a net profit of ₹1,176 crore for the quarter ended September 30, 2026, supported by a sharp reduction in money set aside for bad loans. While the bank saw strong non-interest income growth, interest margins were squeezed by higher deposit costs. Asset quality improved, with gross bad loans declining to 2.73% of total advances.
IndusInd Bank announced a standalone net profit of ₹1,176 crore for the second quarter of the 2027 fiscal year. This result marks a significant recovery for the lender compared to the same period in the previous year. A major factor behind this improved profitability was a sharp 53% reduction in provisions, which fell to ₹1,216 crore from ₹2,622.38 crore in the year-ago period.
In banking terms, provisions are funds that a lender sets aside to cover potential losses from loans that might not be repaid. By needing to set aside less money for these potential losses, the bank effectively boosted its bottom-line profit. The management noted that this reduction was driven by fewer new loans turning bad, suggesting a more stable risk profile in their current portfolio.
The bank’s core income, or net interest income, grew by 3.6% annually to ₹4,569.5 crore. However, this figure did see a minor decline of 2.46% when compared to the previous quarter. To support the overall income, the bank relied on a strong 36.3% jump in non-interest income, such as treasury and fee-based revenue, which reached ₹2,246.8 crore.
A key figure for investors to monitor is the net interest margin, which dropped to 3.23%, a decline of 9 basis points from last year. This margin represents the difference between the interest income the bank earns from loans and the interest it pays to its depositors. This compression highlights the broader banking sector challenge of rising deposit costs. The bank had to manage large inflows of $3.5 billion in foreign currency non-resident accounts (FCNR), which helped expand the deposit base but also created pressure on the cost of funds.
On the asset quality front, the bank showed improvement. Gross non-performing assets—a measure of bad loans—fell to 2.73% of total advances, down from 3.6% in the same quarter last year. Net non-performing assets also improved, settling at 0.83%.
Looking ahead, the primary focus for investors will be how the bank balances its loan growth, which rose 14.95% to ₹3.63 lakh crore, against the ongoing pressure on interest margins. Sustaining deposit growth to match credit demand without further squeezing profitability will remain a critical area for the management team in the coming quarters.