IndusInd Bank Q1 Result Preview: Private sector lender IndusInd Bank on Wednesday is likely to report strong earnings in the first quarter (Q1FY23) of the financial year, as both the top and bottom lines of the bank climbed in double digits during the quarter. While asset quality is set to improve, many brokerages are of the view.
Highest on expectations, Sharekhan saw the private bank’s profit rise over 66 per cent to Rs 1,619 crore for the June-end quarter, followed by Yes Securities, whose profit jumped 61 per cent to Rs 1,574.9 crore in Q1FY23. Rs.
While Motilal Oswal expects the bank’s profit to grow by about 48 per cent year-on-year to Rs 1470 crore and Equirus Securities to post 42 per cent year-on-year profit of Rs 1,443.9 crore.
In terms of net interest income, all the four brokerage houses expect it to grow between 18-14 per cent year-on-year during the June-end quarter as on Wednesday.
Yes Securities in its preview commentary said, “Sequential credit growth will be moderate due to unknown aspects and the bank is bouncing back from the impact of the third wave of Covid-19 in 4QFY22, which will offset the seasonal impact of Q1 to some extent.” of FY23.”
Similarly, sequential NII growth will be particularly healthy, with the yield on advances growing faster than the cost of deposits due to revaluation of external benchmark loans, implying NIM expansion on a sequential basis, the brokerage further said.
Motilal expects a healthy pick-up in credit growth and deposit traction to remain stable as well as asset quality is anticipated to remain under watch. It said, the slippage and restructuring book of MFIs may be monitored.
The brokerage expects margins to remain stable at around 4.2 per cent and credit cost to come down gradually as the focus is on maintaining high PCR.
Similarly, Equirus Securities’ NIM (net interest margin) is likely to remain flat sequentially, and deposit growth to remain at around 3 per cent. Key things to watch out for: Trends in collections in VF/MFIs, commentary on MFI portfolio trends, segments where growth revival is seen and outlook on VF business growth, it added.
Sharekhan informed that the banking sector is expected to report stable performance in Q1FY23E due to healthy credit growth and controlled credit cost. It added that banks are likely to report healthy growth in advances with large private banks continuing to capture market share.
NII growth is likely to be higher and margins will remain stable sequentially, with banks demonstrating pricing power in terms of revaluation of assets and liabilities that occurred in May-June, and higher NII growth with a higher share of floating rate loans. Expect to see more margin, it added.