INDUSINDBK - IndusInd Bank

📊 NSE: INDUSINDBK 🏢 Banks - Private Sector 📅 Last Updated: 12/14/2025 8:04

💰 Financial Performance

Revenue Growth by Segment

Total loans reached INR 3,25,881 Cr in Q2 FY26. Home loans grew 84% YoY to INR 5,500 Cr, while the LAP book grew 10% YoY to INR 12,581 Cr. Core fee income grew 1% QoQ to INR 1,543 Cr. Corporate banking yields stood at 7.84% while consumer banking yields were significantly higher at 13.45% in Q2 FY26.

Geographic Revenue Split

The bank operates a pan-India network with 6,914 branches (including 3,804 BFIL branches) and 3,052 ATMs as of September 2025. While specific regional revenue % is not disclosed, the distribution is diversified across urban and rural India through the Bharat Financial Inclusion network.

Profitability Margins

Net Interest Margin (NIM) was 3.32% in Q2 FY26, a marginal decline from 3.35% in Q1 FY26. The bank reported a net loss of INR 437 Cr in Q2 FY26 due to accelerated provisions, compared to a fiscal 2025 net profit of INR 2,575 Cr. Pre-provisioning profit as a percentage of average assets moderated to 1.9% in Q1 FY26 from 2.1% in FY25.

EBITDA Margin

Core operating profit remained stable QoQ at INR 1,940 Cr in Q2 FY26. Operating expenses declined by 5% QoQ due to cost optimization. Pre-provisioning profit for FY25 was INR 10,661 Cr, down 32.8% from INR 15,864 Cr in FY24 due to income reversals and reclassifications.

Capital Expenditure

Not disclosed in available documents; however, the bank is investing in digital capabilities (Digital 2.0) and distribution expansion to strengthen its vehicle finance and retail segments.

Credit Rating & Borrowing

The bank holds a 'CARE A1+' rating. Borrowing costs were reduced by 26 bps in Q2 FY26 due to deposit rate cuts. Total borrowings were reduced by 13% QoQ to optimize the balance sheet. Capital adequacy remains healthy with a CET1 ratio of 15.48% and CAR of 16.63% as of June 2025.

⚙️ Operational Drivers

Raw Materials

Retail Deposits (31% CASA), Fixed Deposits, and Equity Capital represent the primary 'raw materials' for the bank's lending operations.

Import Sources

Sourced domestically across India through a network of 6,914 branches and digital platforms like 'INDIE'.

Key Suppliers

Not applicable as a financial institution; primary 'suppliers' are retail and corporate depositors.

Capacity Expansion

Current network includes 6,914 branches and 3,052 ATMs. The bank is expanding its distribution in the MSME and Home Loan segments to diversify away from cyclical vehicle and microfinance lending.

Raw Material Costs

Cost of funds decreased by 26 bps in Q2 FY26. The bank is focusing on 'Retailisation' to increase low-cost CASA deposits (currently 31%) to improve margins.

Manufacturing Efficiency

LCR maintained at a healthy 132% with average surplus liquidity of INR 56,000 Cr. Credit-to-Deposit (CD) ratio was maintained at 84% in Q2 FY26.

Logistics & Distribution

Distribution costs are managed through a mix of physical branches and digital transformation, with operating expenses declining 5% QoQ in Q2 FY26.

📈 Strategic Growth

Expected Growth Rate

18-20%

Growth Strategy

The bank aims to achieve growth by diversifying into MSME (INR 18,195 Cr book), Home Loans (84% YoY growth), and LAP. It is leveraging its 'Digital 2.0' strategy and the 'INDIE' app to acquire retail customers and strengthen its liability franchise while maintaining leadership in Vehicle Finance.

Products & Services

Vehicle loans, microfinance loans, MSME loans, home loans, credit cards (4.9% market share), and corporate banking services.

Brand Portfolio

IndusInd Bank, BFIL (Bharat Financial Inclusion Limited), INDIE (Digital Bank).

New Products/Services

Home loans (now INR 5,500 Cr) and 'INDIE for Business' app for digital transformation of MSME banking.

Market Expansion

Targeting the MSME sector and mass housing/home loans to build a less cyclical and more predictable business model over the medium term.

Market Share & Ranking

5th largest private bank in India; 4.9% market share in credit card spends.

Strategic Alliances

Partnership with Bharat Financial Inclusion Ltd (BFIL) for micro-lending; BFIL operates 3,804 branches.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Retailisation' of liabilities and digital-first banking. IndusInd is positioning itself by reducing reliance on bulk deposits and increasing granular retail assets.

Competitive Landscape

Competes with major private banks and NBFCs; maintains leadership in vehicle finance across leading OEMs.

Competitive Moat

Domain expertise in 'Livelihood Loans' (Vehicle and MFI) and a massive rural distribution network through BFIL (3,804 branches) provide a sustainable competitive advantage in underbanked segments.

Macro Economic Sensitivity

Sensitive to interest rate cycles and the 'auto upcycle' which supports the vehicle finance pillar (28% of advances).

Consumer Behavior

Increasing demand for digital banking (INDIE app) and festive-led uptick in vehicle demand.

Geopolitical Risks

Not disclosed as a primary risk in the provided documents.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI's capital adequacy norms (maintaining 16.63% CAR) and income recognition/asset classification (IRAC) norms which led to recent MFI slippage corrections.

Environmental Compliance

ESG scores of 61/100 (CRISIL) and 62/100 (Risk AI), categorized as 'Strong'.

Legal Contingencies

SEBI interim order restricts the former CEO, former Deputy CEO, and three employees from securities transactions due to alleged insider trading. A reversal of INR 1,960 Cr in other income was recorded due to derivative accounting discrepancies.

⚠️ Risk Analysis

Key Uncertainties

Asset quality in the microfinance segment remains a key uncertainty, with GNPAs in MFI rising to 13.2% in FY25. Management transition is also a monitorable risk.