IndusInd Bank shares fell nearly 1 per cent amid profit-booking after rising as much as 2 per cent in early morning trade on its robust earnings for the July-September quarter.

IndusInd Bank reported a 26 per cent jump in its net profit for the Q2 at Rs. 704 crore, on the back of robust growth in its interest income and increase in profitability. Its earnings were in line with the Street’s estimates.

The private sector lender’s net interest income(NII), which is the excess of interest earned over interest paid on deposits, soared 33 per cent to Rs. 1,460 crore in Q2.
Analysts polled by NDTV Profit had estimated IndusInd Bank’s net profit at Rs. 706 crore, while its NII was seen expanding to Rs. 1,405 crore.

IndusInd Bank had reported a net profit of Rs. 560 crore on NII of Rs. 1,094 crore in the corresponding quarter of the previous fiscal.

IndusInd Bank’s profit also got a boost from other income, or non-interest incomes, which grew 24 per cent to Rs. 970 crore.

The private sector lender also reported improvement in its profitability as its net interest margin, which is a gauge of profitability for banks, rose to 4 per cent in Q2 compared to Street estimates of 3.8-3.9 per cent.

Meanwhile, non-performing assets or bad loans of IndusInd Bank remained stable during the quarter. Its gross non-performing assets (GNPA) increased 4 per cent sequentially to Rs. 899 crore compared to Rs. 861 crore in Q1. As a percentage of total advances, GNPA stood at 0.90 per cent compared to 0.91 per cent sequentially.

IndusInd Bank’s net non-performing assets, which is GNPA minus provisions, stood at 0.37 per cent of advances compared to 0.38 per cent in the June quarter.

Global brokerage Morgan Stanley has maintained its “overweight” rating on IndusInd Bank for a target price of Rs 1,525, which indicates a potential upside of 13 per cent over its previous closing price.

Morgan Stanley said IndusInd Bank has multiple drivers to sustain strong earnings and falling interest rates is one of the key positives for the company.

As of 11.18 a.m., IndusInd Bank shares traded 0.28 per cent lower at Rs 1,217.60, outperforming the industry benchmark Nifty Bank, which was down 1.4 per cent.