IndusInd Bank back in profit at ₹1,242 Cr as provisions ease; NIM still under pressure

IndusInd Bank's consolidated net profit swung to ₹1,241.8 Cr for Q2 FY27 (quarter ended September 30, 2026), reversing a ₹436.9 Cr loss in the year-ago quarter and up 19.7% sequentially from ₹1,037.0 Cr in Q1 FY27. Standalone PAT came in at ₹1,176.1 Cr, roughly 5.6% below the consolidated figure — a gap attributable to consolidating BFIL and the IndusInd Marketing & Financial Services associate; both bases tell the same turnaround story, so the divergence isn't material to the headline read. Consolidated revenue (interest earned) rose a modest 1.6% YoY and 4.3% QoQ to ₹11,796.0 Cr, with basic EPS at ₹15.94 against ₹13.31 in Q1 FY27 and a loss per share of ₹5.61 a year ago.

The turnaround was driven almost entirely by a sharp drop in provisioning rather than revenue strength: provisions (other than tax) fell to ₹1,222.6 Cr from ₹2,631.2 Cr a year ago and ₹1,384.3 Cr last quarter, lifting consolidated net profit margin to 8.84% from -3.30% YoY and 7.92% QoQ. Net interest income, however, came in at ₹4,569.5 Cr — short of the ₹4,700–4,800 Cr range flagged in our pre-result preview — confirming the NIM-compression risk management had signalled; operating margin (operating profit over interest income) held near-flat at 24.37% versus 24.52% in Q1 FY27 but is up sharply from 17.64% a year ago. Asset quality improved alongside: gross NPA fell to 2.73% (from 3.60% YoY, 3.25% QoQ) and net NPA to 0.83% (from 1.04% YoY, 0.95% QoQ), consistent with management's guidance that micro-loan slippages would materially ease.

The stock went into the print at ₹835, down 12.6% over the past month of trading.

For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 4 consecutive quarters.

No external Q2 FY27 PAT consensus could be located; our pre-result preview carried a cautious Street tone — 37 analysts covering the stock, sentiment split 25% Buy/38% Hold/37% Sell, median target cut 14% to ₹808 — debating whether NIM pressure was cyclical or structural. On the one concrete pre-result marker available, NII, the quarter missed (₹4,569 Cr vs ₹4,700–4,800 Cr expected), but the bottom line outperformed the gloomy mood with a clean swing to profit and 19.7% sequential PAT growth. Against management's own January 2026 concall guidance — growing advances in line with the market through FY26-27 and reaching 1% quarterly ROA by the end of FY26-27 — advances grew 11.4% YoY to ₹3,63,104 Cr (standalone) and deposits 10.1% YoY to ₹4,28,832 Cr, both tracking the stated pace; annualised ROA improved to 0.87% (consol) from 0.78% in Q1 FY27 but remains below the 1% exit target, so the bank is on-trend rather than there yet. The Board, meeting the same day, also approved Priyanka Sinha's appointment as an independent director; no separate management press-release commentary was available in the filing to quote beyond the regulatory results statement.