> ## Content Index > Fetch the complete content index at: https://www.moatmarginresearch.com/llms.txt > Use this file to discover other available public pages before exploring further. # IndusInd Bank Q2: Back to Profit, Margin Still Slipping - URL: https://www.moatmarginresearch.com/indusind-bank-q2-profit-returns/ - Published: 2026-10-24T06:32:57.000Z - Updated: 2026-10-24T06:32:57.000Z - Description: IndusInd Bank earned ₹1,242 crore in Q2 FY27 after a loss a year ago, as provisions halved. Its margin fell to 3.23% and savings deposits shrank 5%. - Author: A K Karthikeyan - Tags: Moat Insights **IndusInd Bank made a net profit of ₹1,242 crore in the September quarter, against a loss of ₹437 crore a year earlier. Most of the swing came from provisions, which fell by more than half, and from other income, up 36%. The core business is less settled: net interest income grew 4%, the margin fell to 3.23%, and savings deposits shrank 5% from a year ago. A return on equity of 7.37% is better than last year, and still low for a private bank.** ## The quarter in numbers | Consolidated, ₹ crore | Q2 FY27 | Q2 FY26 | Change | Source | | ---------------------------- | ------- | ------- | ------ | ------ | | Net interest income | 4,569 | 4,409 | 4% | \[I\] | | Other income | 2,248 | 1,651 | 36% | \[I\] | | Operating expenses | 3,943 | 4,013 | (2)% | \[I\] | | Operating profit | 2,874 | 2,047 | 40% | \[I\] | | Provisions and contingencies | 1,223 | 2,631 | (54)% | \[I\] | | Profit after tax | 1,242 | (437) | NM | \[I\] | Against June, profit rose 20% from ₹1,037 crore in the presentation's table (\[I\]); the press release instead calls it "up by 51% QoQ against normalized profit of ₹824 crores for Q1 FY 27" (\[P\]). The filings do not explain the normalisation. ## Bad loans: the improving part Gross NPA fell to 2.73% from 3.25% in June, and net NPA to 0.83% from 0.95% (\[P\]). The presentation shows loans in the SMA-1 and SMA-2 early-warning buckets at 0.05%, against 0.12% in June, and describes "Continued moderation in stress pools with lower slippages" (\[I\]). The provision coverage ratio slipped to 70.19% (\[P\]). ## The margin: the part still slipping The net interest margin was 3.23%, against 3.32% a year ago (\[P\]) and 3.57% in June (\[I\]). The bank attributes the fall to dollar deposits: "NIM Impact coming from FCNR (B) mobilization" (\[I\]). Banks raised these foreign-currency deposits in the quarter, and the money parked in liquid assets earns little at first. The balance sheet shows the effect: loans rose 11% in the quarter to ₹3,63,104 crore and borrowings 23% to ₹53,781 crore (\[I\]). The deposit mix is the deeper issue for a bank's moat: | ₹ crore, 30 Sep | 2026 | 2025 | Change | Source | | ---------------- | -------- | -------- | ------ | ------ | | Current accounts | 36,742 | 31,916 | 15% | \[I\] | | Savings accounts | 83,024 | 87,854 | (5)% | \[I\] | | Total deposits | 4,28,832 | 3,89,600 | 10% | \[I\] | CASA, current and savings accounts together, was 27.93% of deposits (\[P\]). Savings balances are the cheapest money a bank has, and IndusInd's are shrinking while its total deposits grow. ## Moat and margin **Focus moat: the deposit franchise.** A bank's lasting edge is cheap, sticky money. IndusInd's savings deposits fell 5% in a year, so growth is being funded by costlier term deposits, borrowings and FCNR money. Until that turns, the margin has less room. **Margin: repaired by provisions, not by spread.** Operating profit rose 40%, helped by flat costs and higher other income, and provisions halved. Return on assets was 0.87% and return on equity 7.37% (\[I\]); last year's quarter was a loss. **MoatSCORE** (Moat Screener, deep dive): IndusInd Bank 4.44, AMBER+. For comparison, HDFC Bank 6.04, ICICI Bank 6.05, Kotak Mahindra Bank 6.03 and Axis Bank 5.14 (\[MS\]). ## The bear case - **Spread is narrowing**: NII fell 2% from June, and the margin fell 34 basis points in a quarter (our arithmetic, 3.57% to 3.23%). - **Savings deposits are shrinking**, by 5% in a year. - **Profit leans on non-core lines**: other income rose 36% and provisions fell 54%; neither is guaranteed to repeat. - **Two different "June" profits** in the same day's filings, with no reconciliation. ## The case for - **Asset quality is improving** on every measure the bank gives: gross and net NPA, SMA buckets, restructured book (\[I\]). - **Costs fell** 2% from a year ago while income grew (\[I\]). - **Capital is adequate**, with a total capital ratio of 16.59% and Tier 1 of 15.55% (\[P\]). ## What to watch 1. The margin once the FCNR money is lent out. 2. Savings-account balances, which fell 5% in the quarter as well as over the year (\[I\]). 3. Whether provisions stay near this quarter's ₹1,223 crore. ## Sources - **\[P\]** [IndusInd Bank, Q2 FY27 press release](https://nsearchives.nseindia.com/corporate/INDUSINDBK4%5F23102026162409%5FfinaluploadPRsigned.pdf) (NSE) - **\[I\]** [IndusInd Bank, Q2 FY27 investor presentation](https://nsearchives.nseindia.com/corporate/INDUSINDBK4%5F23102026161027%5FInvestor%5FPresentationmergedfinalsigned.pdf) (NSE) - **\[MS\]** [Moat & Margin, Moat Screener](https://www.moatmarginresearch.com/moat-screener/) and [How MoatSCORE works](https://www.moatmarginresearch.com/moatscore/) --- > Educational research, not investment advice. Every figure above is drawn from IndusInd Bank's own filings, read from the primary documents on 24 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE read live from the Moat Screener on 24 October 2026\. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.