IndusInd Bank (IIB IN) – Q2FY26 Result Update – Core performance stabilizing – HOLD
Published on 19 Oct 2025
IIB saw net loss due to Rs16bn MFI write-off that led to additional provision of Rs8.9bn. Core PPoP is stabilizing since adjusted for one-time recovery of 14bps in Q1’26, it grew by 4.2% QoQ to Rs19.2bn. As per the CEO, improving asset-liability mix would be prioritized over growth. Incremental focus would be to scale-up segments like MSME, housing, gold, agri etc. to increase granularity. IIB has further tightened MFI underwriting by conducting income assessment, voter ID check and field verification which along with credit guarantee scheme would help reduce provisions’ volatility across cycles. Target is to reach NNPA of 50-60bps over medium term (now 104bps). With new MD&CEO at the bank’s helm, earnings downgrade cycle largely is over, however, visibility in terms of time-line to reach 1.0% RoA is still hazy. We keep multiple at 0.9x and maintain ‘HOLD’ but raise TP to Rs840 from Rs780 as we also roll forward to Sep’27 ABV.
