26-Oct-2026 08:57:13
UBS on IndusInd BK ; Sell, TP Rs 870
Reported PAT of Rs12.4bn in Q2 (12% ahead of UBSe), supported by stronger fee income and lower credit cost (1.40% vs 1.74% in Q1) NII grew 3.6% YoY NIM declined 12bp QoQ to 3.23% vs normalized 3.35%, largely reflecting FCNR(B)- related yield pressure, and some change in mix. Reported loan yields declined 26bp to 10.67%, while deposit costs rose 3bp to 5.96%. Other income grew 26% QoQ/36% YoY, including cRs1bn of incremental FCNR-related FX sales income and AFS/HTM investment gains, while core fee-to-assets improved to 1.35% from 1.20%. Opex rose 7% QoQ on business and growth spends, while PPoP grew 4% QoQ reported/c15% normalized. RoA improved QoQ to 0.87% from normalized 0.63% GNPA/NNPA declined sequentially to 2.7%/0.8%, although CASA weakness and funding cost pressure constrain margin recovery.