IndusInd Bank: Investors need to be watchful despite strong June quarter

Numbers were aided by BFIL merger and largely met expectations, but some asset quality stress visible in select segments

Putting to rest fears about another period of elevated asset quality pain, the June quarter (Q1) turned out rather smooth for IndusInd Bank. 

Being the first quarter after its merger with Bharat Financial Inclusion (BFIL) — India’s leading micro finance lender — it helped IndusInd in many ways. 

For one, the 34 per cent consolidated growth rate in net interest income (NII) was quite robust and matched estimates. The high-yielding assets of BFIL also spruced up IndusInd’s net interest margin (NIM; a profitability measure) back to the 4-per-cent mark after over a year. Thus, net profit grew 38 per cent