Shares of IndusInd Bank witnessed a 3.1% rise on Thursday, following the release of the company's mixed second quarter results. The bank reported a year-on-year net profit growth of 22%, reaching Rs 2,181 crore, while its Net Interest Income (NII) witnessed an 18% YoY increase to Rs 5,077 crore in the period.
Despite these positive financial outcomes, some analysts highlighted concerns over elevated slippages and a slower deposit growth rate. The bank's Gross Non-Performing Assets (NPA) showed only minimal improvement from the previous quarter's 1.94% to the current 1.93%. Net NPAs were slightly lower at 0.57% against the first quarter of fiscal year 2024's 0.58%.
Analysts at Morgan Stanley (NYSE:MS) maintained their "overweight" call for IndusInd Bank but reduced their target price to Rs 1,775 from Rs 1,800. This adjustment was attributed to higher costs and increased slippages. Meanwhile, HSBC analysts noted that the second quarter slippages of Rs ccrore were higher than anticipated.
They suggested that improvements in IndusInd Bank's financial performance could be seen with changes in loan mix, operating leverage, and lower credit costs. Total provisions declined by 15% to Rs 974 crore, further contributing to the bank's financial performance this quarter.
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