Story behind IndusInd Bank’s Q2FY23 Results

When we look at the highlighted section of IndusInd Bank Ltd’s income statment, it is evident that the drastic increase in profitability stems from the reduction of Provisions & Contingencies amount. That would explain as to why the YoY growth for Operating Profit is 10% whereas the YoY growth for Profit Before Tax is 59%.

Drastic Decrease in Provision and Contingencies:

₹ in Cr.	Q2FY23	Q2FY22	YoY (%)
Net Interest Income	4,302	3,658	18%
Other Income	2,011	1,841	9%
Total Income	6,313	5,500	15%
Operating Expenses	2,769	2,277	22%
Operating Profit	3,544	3,223	10%
Provisions & Contingencies	1,141	1,707	(33%)
Profit Before Tax	2,403	1,516	59%
Provision for Tax	598	369	62%
Profit After Tax	1,805	1,147	57%

Key Ratios:

A high share of CASA Deposits proved that sources of funds are healthier and stable compared to other sources of deposits. As interest charged on CASA Deposits are lower than other forms of deposits. So, they contribute to higher Net Interest Margin.

The higher net interest margins results in IndusInd Bank Ltd. to observe one of the highest operating margins in the Industry.

Asset Quality:

Asset Quality of IndusInd Bank Ltd. for this quarter can be assessed through the movement in the Bank’s non performing assets. It is evident through the below diagram that there is positive movement on non performing assets. 

On a QoQ scale, there has been a decrease from both Gross Non Performing Assets and Net Non Performing Assets.