IndusInd Bank Q3FY26 Earnings Results Out: Profit Recovers Sequentially, But Yearly Performance Remains Weak

IndusInd Bank reported a sharp recovery in profitability on a quarter-on-quarter basis in Q3FY26, returning to the black after posting a loss in the previous quarter. However, the lender’s performance remained weak on a year-on-year basis, with profits, asset quality, and loan growth under pressure.

Net Profit Improves QoQ, Slumps YoY

For the December quarter, IndusInd Bank posted a net profit of ₹128 crore, compared to a loss of ₹437 crore in Q2FY26. Despite the sequential improvement, profit declined 91% year-on-year, as the bank had reported ₹1,402.35 crore in profit in Q3FY25.

The sharp YoY fall highlights ongoing challenges in credit growth, asset quality, and higher provisioning requirements.

Net Interest Income And Margins

Net interest income (NII) for Q3FY26 stood at ₹4,562 crore, up 3% from ₹4,409 crore in the previous quarter. However, NII declined 13% year-on-year compared to ₹5,228 crore reported in the same period last year.

Net interest margin (NIM) improved sequentially to 3.52%, from 3.32% in Q2FY26, indicating some improvement in lending spreads and cost management.

Operating Performance And Costs

Pre-provisioning operating profit (PPOP) came in at ₹2,270 crore, significantly lower than ₹3,601 crore reported a year earlier. Total expenditure during the quarter stood at ₹10,810 crore, marginally lower than ₹11,555 crore in Q3FY25, reflecting some cost control measures.

However, higher credit costs continued to weigh on overall profitability.

Deposits And Advances Decline

Total deposits declined 4% year-on-year to ₹3,93,815 crore. CASA deposits stood at ₹1,19,104 crore, accounting for 30% of total deposits.

Total advances fell sharply by 13% YoY to ₹3,17,536 crore, pointing to subdued loan growth and cautious lending amid asset quality concerns.

Asset Quality Weakens Further

Asset quality showed deterioration during the quarter. Gross non-performing assets (GNPA) rose to 3.56%, from 2.25% a year ago. Net NPA increased to 1.04%, compared to 0.68% in Q3FY25.

Provisions and contingencies rose 20% YoY to ₹2,096 crore, reflecting stress in certain loan segments.

Indusind Bank Share Price Reaction

Following the earnings announcement, IndusInd Bank shares declined 1.04%, closing at ₹893.10 on the BSE.

Read more: US$11 Billion, One City: Why is Tata Sons Going All InOn Navi Mumbai?

Conclusion

IndusInd Bank’s Q3FY26 results show a sequential recovery in profits and margins, but underlying challenges remain. Weak loan growth, rising NPAs, and higher provisions continue to pressure year-on-year performance. The bank’s near-term outlook will depend on improvements in asset quality, credit growth revival, and tighter risk management.

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