IDBI Bank Q2 FY27: PAT ₹2,226 Cr Falls YoY on One-Off Base; NIM Expands to 4.11%

IDBI Bank's consolidated net profit for Q2 FY-2027 came in at ₹2,226.24 Cr (before minority interest; ₹2,214.45 Cr after), down 31.3% year-on-year from ₹3,240.77 Cr but up 4.5% quarter-on-quarter from ₹2,130.57 Cr. The standalone figure of ₹2,205.45 Cr — the number the Bank and media headlined — rose 4.3% QoQ and sits just above the ₹2,150–2,200 Cr range our pre-result preview flagged as on-plan, a modest beat on the raw number. The headline YoY decline is largely a base-effect artifact rather than a genuine profit miss: Q2 FY26 included a ₹1,698.91 Cr pre-tax one-off gain from the Bank's sale of its 11.11% stake in NSDL via OFS (Note 9), which alone accounted for roughly 45% of that quarter's pre-tax profit. Stripping that one-off out, adjusted YoY PAT growth is approximately +24.3%, materially stronger than the reported print and broadly in line with the 19.8% YoY growth in interest income (₹8,519.33 Cr consolidated). Margin quality — the central question our preview flagged — improved on the metric that matters most: standalone Net Interest Margin (annualised) expanded to 4.11% from 3.61% in Q1 FY27 and 3.71% a year ago, a genuine two-quarter acceleration rather than a one-off artifact. Reported net margin (PAT/total income) looks like it compressed sharply, from 34.99% a year ago to 22.41% this quarter, but that compression is explained almost entirely by the NSDL gain inflating the year-ago base. Operating profit of ₹2,924.63 Cr (consolidated) was roughly flat against the year-ago ₹3,146.96 Cr, which itself was lifted by the same one-off — again pointing to steady underlying operating performance. Provisions were a modest ₹10.18 Cr expense this quarter, a sharp swing from the ₹636–650 Cr net write-backs booked in each of the prior two comparison quarters; despite losing that tailwind, Gross NPA ratio still improved to 2.12% (standalone) from 2.30% in Q1 FY27 and 2.65% a year ago, beating the preview's expected 2.3–2.5% range, while Provision Coverage Ratio held at a high 99.24% (vs 99.31% in Q1 FY27). Balance-sheet growth matches the Bank's October 3 provisional update: total business rose 18% YoY to ₹6.27 lakh Cr, with advances at ₹2.72 lakh Cr and deposits up 17% YoY to ₹3.56 lakh Cr, both feeding the quarter's interest-income growth. Capital adequacy strengthened further, with consolidated CRAR at 27.22% (up from 27.04% in Q1 FY27 and 25.53% a year ago). The filing does not quantify any impact from the proposed 3-day employee strike flagged for late September, nor does it disclose a CASA ratio, so those two preview watch items remain unresolved from this release. Separately, and unrelated to this quarter's operating numbers, the government's long-pending IDBI Bank divestment was approved on October 14, 2026, with a Fairfax-led consortium set to acquire a 60.72% stake; the results still show Government of India shareholding unchanged at 45.48% as of September 30, since the deal had not completed within the quarter. IDBI Bank issues no formal forward guidance, and no management press release accompanying this filing was available to extract, so there is no outlook statement to grade this print against; the only point of comparison is our own pre-result preview, which this print modestly beat on profit and clearly beat on asset quality, while resolving the NIM watch item positively. Going into Q3 FY27, the key markers are whether the 4.11% NIM holds as deposit competition continues, whether provisions stay near this quarter's low level given the improved NPA ratio, and how the Fairfax stake-sale process — now approved but not yet completed — affects the Bank's ownership and strategy in the coming quarters.