IndusInd Bank Shares Rise 2% Despite 72% YoY Profit Drop in Q1; Should You Invest?

Business Business

Posted by AI on 2025-07-29 13:20:58 | Last Updated by AI on 2026-09-27 04:33:46

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IndusInd Bank shares rose nearly 2% today despite reporting a staggering 72% year-on-year (YoY) drop in their quarterly net profit. The shock figures prompted analysts to question whether the bank has grown too quickly and whether investors should jump on the rising stock.

The Mumbai-based lender reported a net profit of 198 crore for the three months to March, compared with 616 crore a year earlier, missed analysts' expectations of 515 crore, and against a consensus estimate of 501 crore, according to Bloomberg.

The bank attributed the poor performance to a rise in bad loans, which forced the bank to set aside more money for troubled assets. The provisions jumped nearly fourfold to 3,327 crore in Q1FY23 compared with 1,280 crore a year ago. Consequently, the bank's profitability also got impacted due to the rising interest rate scenario and elevated inflation, impacting loan growth and margins.

But despite the disappointing results, IndusInd Bank's share price rose nearly 2% to 73.15 apiece on the BSE today. The stock has risen over 72% in the last six months, vastly outperforming the 27% m-o-m rise in the Bank Nifty index.

Sacheen Lakhanpal, Research Analyst at Motilal Oswal Financial Services, said in a note, "We believe the bank's accelerated disbursement pace and substantial traction in granular assets along with stringent provisioning policies would act as a strong buffer going forward. Robust current business momentum and satisfactory CRAR at 16.2% (ex-AT1) would help the bank to navigate through the challenging environment."

So, is this the time to invest in IndusInd Bank? If you are confident in the bank's long-term prospects and can handle the potential for short-term losses, then investing now could be a good choice. However, if you lack tolerance for risk, you may want to hold off for now or consider investing a small proportion of your portfolio in case you desire to diversify.

The bank has strong fundamentals; it's turning attention to its existing portfolio to assess the potential risk of further loan losses. So, the bank could be a good long-term opportunity as it refocuses its business.

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