Indian Bank (INDIANB) Q2 24/25 earnings summary

Executive summary

• Business grew 10% year-over-year, with deposits up 8% and credit up 12%; retail credit rose 15%, agriculture 16%, MSME 8%, and corporate 9%.

• Net profit surged 36% YoY for Q2FY25 and 38% YoY for H1FY25; operating profit increased 10% YoY for Q2FY25.

• Asset quality improved significantly, with Gross NPA at 3.48% (down 149 bps YoY) and Net NPA at 0.27% (down 33 bps YoY).

• Digital transactions now account for 91-92% of total, with exponential growth in digital home, vehicle, and MSME loans.

• Standalone and consolidated unaudited financial results for Q2 and H1 FY25 were reviewed and approved by the board on October 28, 2024.

Financial highlights

• Net Interest Income for Q2FY25 rose 8% YoY to ₹6,194 Cr; H1FY25 at ₹12,372 Cr, up 8% YoY.

• Operating profit for Q2FY25 increased 10% YoY to ₹4,728 Cr; H1FY25 at ₹9,230 Cr, up 9% YoY.

• Cost-to-income ratio stood at 44-45%; Return on Assets (RoA) at 1.33% and Return on Equity (RoE) at 21%.

• Provision Coverage Ratio (PCR) increased to 97.7% from 96.6%.

• Earnings per share reached ₹80.37 for Q2FY25.

Outlook and guidance

• Deposit growth guidance of 8-10% and credit growth of 11-13% reaffirmed, with current performance tracking guidance.

• NIM guidance of 3.40% expected to be maintained or exceeded.

• Asset quality expected to improve further, with collection efficiency at 95%.

• Board approved a capital plan for FY25 of ₹7,000 Cr (₹5,000 Cr equity, ₹2,000 Cr AT-1/Tier-II).

• Recovery guidance for the year is INR 7,000-7,500 crore.