Shares of IndusInd Bank fell over 5% in early trade on Tuesday, reacting to the lender’s weak third-quarter earnings.
The private sector bank on January 23 reported an 89% year-on-year decline in standalone net profit for the December quarter to Rs 161 crore, compared with Rs 1,401 crore in the same period last year.
However, on a sequential basis, the bank returned to profit, aided by a drop in provisions, after having posted a loss of Rs 445 crore in the second quarter of FY26.
Net interest income (NII) — the difference between interest earned and interest paid — rose 3% quarter-on-quarter, but declined 13% year-on-year to Rs 4,562 crore, reflecting pressure on core profitability.
The bank’s asset quality showed marginal improvement, with gross non-performing assets (GNPA) at 3.56% and net NPA at 1.04%, compared with 3.60% and 1.04%, respectively, in Q2FY26.
In a stock exchange filing, the lender said its provision coverage ratio improved to 71.5% as of December 31, 2025. Provisions and contingencies for the quarter stood at Rs 2,096 crore, compared with Rs 1,744 crore in the corresponding quarter last year. Total loan-related provisions were at Rs 10,027 crore, accounting for 3.16% of the loan book.
Net interest margin (NIM) improved sequentially to 3.52% in Q3FY26, from 3.32% in the previous quarter, offering some relief on core operating metrics.
Earlier in the day, the bank announced a leadership transition at the board level, with Chairman Sunil Mehta set to step down upon completion of his term in January. The bank named former State Bank of India Managing Director Arijit Basu as his successor.
On a sequential basis, provisions and contingencies declined 20% to Rs 2,089 crore in the December quarter. In comparison, the bank had sharply raised provisions for its microloan portfolio in the September quarter, resulting in a loss of Rs 445 crore.
The lender’s loan book contracted 13.1% year-on-year as of December-end, while deposits declined 3.8%, as disclosed earlier this month.
IndusInd Bank has seen significant churn in senior leadership over the past year, amid concerns related to governance and accounting lapses. These developments led to the exit of former CEO Sumant Kathpalia and Deputy CEO Arun Khurana.
The bank had taken a Rs 2,100-crore hit to its accounts, posting its largest-ever loss in the March quarter. It returned to profitability in the June quarter, and veteran banker Rajiv Anand assumed charge as chief executive at the end of August.
IndusInd Share Price Today
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The scrip fell as much as 5.22% to Rs 851.15 apiece. It pared gains/losses to trade 3.15% lower at Rs 869.70 apiece, as of 10:04 a.m. This compares to a 0.35% advance in the NSE Nifty 50 Index.
It has fallen 4.37% in the last 12 months. Total traded volume so far in the day stood at 0.8 times its 30-day average. The relative strength index was at 63.12.
Out of 53 analysts tracking the company, six maintain a ‘buy’ rating, 17 recommend a ‘hold,’ and 20 suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target implies an downside of 3.6%.
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