IndusInd Bank shares rise 2%: Here is what management said following Q1 earnings

IndusInd Bank on Monday reported a 68.21% year-on-year (YoY) decline in its standalone net profit to ₹684.25 crore in the first quarter of the 2025-26 financial year (Q1FY26).

In the corresponding period a year ago, its net profit stood at ₹2,152.16 crore. The bank had reported a net loss of ₹2,236 crore in the previous quarter (Q4 FY25).

Its net interest income (NII) stood at ₹4,640 crore in the June FY26 quarter, falling 14.20% YoY from ₹5,408 crore in Q1FY25. Its net interest margin (NIM) contracted to 3.46% from the 4.25% it had reported in the year-ago period.

The bank's asset quality declined both YoY and sequentially. In Q1FY26, its gross non-performing asset (GNPA) was at 3.64%, compared to 2.02% in the same period last fiscal year and 3.13% in Q4FY25. Its net NPA increased to 1.12%, as against 0.20% YoY and 0.95% on a quarter-on-quarter (QoQ) basis.

Its total capital adequacy ratio for the quarter under review stood at 16.63% as of June 30, 2025, compared to 17.04% in the same period last year. Its tier 1 CRAR (Capital to Risk-weighted Assets Ratio) was at 15.48% in Q1FY26, as against 15.64% as of June 30, 2024. Its risk-weighted assets were at ₹4.10 lakh crores as against ₹3.89 lakh crores a year ago.

IndusInd Bank Chairman Sunil Mehta said the bank has delivered "clean and profitable" results in the June quarter, marking a "robust recovery" from the March quarter.

"We have delivered Q1 results without any carryover of the prior period irregularities. Financial impact of legacy issues is behind us," Mehta told analysts over a call.

There was no impact of the legacy issues in the first quarter results as well, he said, adding that the interim management is working to restore the lost ground so that the entity can perform to its potential.

Time was spent by the management in resolving the concerns on the microfinance and the treasury side, which had led it to admit fraud as well, he said, specifying that it includes upping governance and transparency and also improving board oversight on the MFI side, while on the treasury front, it has upped the system and stopped internal deals.

The bank is also progressing well on the appointment of a full-time chief executive and awaiting regulatory approval on the candidates it has sent, he said, adding that efforts to build a senior management team from both the internal talent of over 45,000 people and external ones are also ongoing simultaneously.

The board has also outlined a five-point strategy for bettering the performance going ahead, which includes reducing deposit rate offerings, pulling away from low-margin business, and stringent cost management, he said.

Mehta said the bank is planning to more than halve the overall operating expenses growth to single digits from the 20% level it has witnessed in each of the last five years. Apart from this, the incoming CEO will come out with a detailed strategic roadmap.

The management said the bank continues to be cautious on the microfinance business and does not expect growth till Q3 of FY26. However, unlike its larger rival Kotak Mahindra Bank, it does not see any stress in the construction vehicles business and will be working towards growing it, as the slippages will be lower in FY26 than in the fiscal-ago period.

Last seen, shares of IndusInd Bank were seen at ₹808.9 apiece, rising 0.80% on NSE.