IndusInd Bank Q1 Results: Net Profit Drops 72% To Rs 604 Cr Amid Higher Provisions, Weak CASA

IndusInd Bank Limited's Board of Directors approved the bank's financial results for the quarter ending June 30, 2025, during a meeting on Monday, July 28, 2025. Due to a drop in core income and higher provisions, IndusInd Bank's consolidated net profit fell 72% YoY to Rs 604 crore in the first quarter of FY26.

This was mostly because provisions and contingencies climbed by 68% to Rs 1,760 crore amid rising stress in consumer and microfinance segments. The total income fell 13% to Rs 6,797 crore, with net interest income (NII) down 14% YoY at Rs 4,640 crore and other income down 12% to Rs 2,157 crore. The net interest margin (NIM) dropped to 3.46%, down 79 basis points YoY, while operating profit fell 35% YoY to Rs 2,568 crore.

The consolidated balance sheet of IndusInd Bank for the first quarter of FY26 showed modest growth, with total assets increasing 2% year on year to Rs 5,39,552 crore, despite a 3% sequential decline. On the liabilities side, borrowings rose 18% YoY to Rs 52,203 crore, while deposits were down 3% on a quarterly basis but remained practically unchanged on an annual basis at Rs 3,97,144 crore. On the asset side, investments increased 8% YoY to Rs 1,09,147 crore, while advances shrank 4% YoY to Rs 3,33,694 crore. With CET1 at 15.48%, the overall capital adequacy ratio was a strong 16.63%.

With net non-performing assets (NPAs) growing to 1.12% and gross non-performing assets (NPAs) increasing to Rs 12,481 crore from Rs 11,046 crore in the previous quarter, IndusInd Bank's asset quality weakened in Q1 FY26. In spite of this, the bank was able to maintain a provision coverage ratio of 70% thanks to a total of Rs 10,473 crore in loan-related provisions, which included Rs 8,689 crore in specific provisions, Rs 70 crore in floating provisions, and Rs 1,714 crore in standard asset provisions.

With CASA deposits falling 14% YoY to Rs 1,25,006 crore, bringing the CASA ratio down to 31%, and term deposits growing 8% YoY to Rs 2,72,138 crore, deposits remained at Rs 3,97,144 crore, basically unchanged YoY but down 3% QoQ. With write-offs, upgrades, and recoveries totaling Rs 1,133 crore, the movement in NPAs showed fresh slippages of Rs 2,567 crore.

Mr. Sunil Mehta, the Chairman of the Board of Directors, IndusInd Bank said, "The Bank has delivered clean and profitable Q1 results, marking a robust recovery from the challenges of the previous quarter. Leadership transition is progressing well, with our final recommendations being submitted to the regulator. The Board remains confident of moving forward as per planned timelines. The Committee of Executives has ensured seamless continuity and effective execution during this phase. The Bank has taken decisive action on legacy issues, strengthened governance, and enhanced operational controls. The Bank is also actively working to integrate its diverse business lines under the 'One IndusInd' approach, unlocking synergies and delivering a unified banking experience to our customers. The Bank remains focused on profitability, cost discipline, and stakeholder engagement, while building a sustainable franchise across our core businesses. These results reflect our commitment to transparency, resilience, and long-term value creation for all our stakeholders."

Mr. Soumitra Sen and Mr Anil Rao, the members of the Committee of Executives, IndusInd Bank said, "The Bank's Q1 performance reflects the resilience of our core businesses and financial transparency. We returned to profitability with a net profit of Rs.604 crores, supported by steady recovery in core businesses and calibrated actions on cost optimization. Our capital adequacy remains strong with CRAR at 16.63% (excluding Q1 profits), reflecting a solid balance sheet and foundation. Our focus remains on unlocking profitability, enhancing operational efficiency, and deepening stakeholder trust. We are confident that the initiatives being worked on will help the Bank to build on the momentum in the coming quarters."

The bank's distribution network has 3,110 branches and banking sites as well as 3,052 onsite and offsite ATMs as of June 30, 2025, compared to 3,013 branches and banking locations and 2,988 onsite and offsite ATMs as of June 30, 2024. As of June 30, 2025, the client base was around 42 million.