IndusInd Bank Exits from Top 10 Valued Lenders After Earnings Miss, 18% Stock Drop

IndusInd Bank has dropped from the top 10 most-valued lenders in terms of market capitalisation after posting disappointing earnings for the September quarter. Following the results, its shares fell by 18 per cent—the sharpest decline since the March 2020 pandemic lows—hitting a one-year low of Rs 1,065 per share. The bank’s market cap has now slipped to Rs 81,000 crore, placing it 12 among India’s banks, while Canara Bank, IDBI Bank, and Union Bank entered the top 10 list.

India’s highest-valued bank, HDFC Bank, leads with a market cap of Rs 13.25 lakh crore, followed by ICICI Bank at Rs 8.81 lakh crore and State Bank of India at Rs 6.97 lakh crore. Axis Bank ranks fourth, followed by Kotak Mahindra Bank, Bank of Baroda, Punjab National Bank, Indian Overseas Bank, Canara Bank, IDBI Bank, and Union Bank.

IndusInd Bank’s weak performance in the quarter was marked by higher provisions, declining other income, and slower growth in high-yield loans. Brokerage firms have revised their target prices downward in response. While deposit growth remained steady, driven by term deposits, net interest margin (NIM) contracted due to rising costs and sluggish growth in high-yielding assets. Asset quality slightly deteriorated as fresh slippages in the consumer finance segment increased.

The bank’s consolidated net profit fell 40 per cent year-on-year to Rs 1,331 crore in Q2 FY25, largely missing market expectations. Loan loss provisions nearly doubled, and operating expenses outpaced income growth, putting further pressure on profits. Net interest income (NII) grew 5 per cent, while NIM declined to 4.08 per cent from 4.29 per cent a year earlier. Provisions rose sharply to Rs 1,820 crore, up 87 per cent from Rs 974 crore. Meanwhile, the gross non-performing asset (GNPA) ratio rose by nine basis points to 2.11 per cent, and the net NPA ratio increased by seven basis points to 0.64 per cent.

In contrast, several public sector banks, including Bank of Baroda, Punjab National Bank, Indian Overseas Bank, Union Bank, and Canara Bank, have seen their market capitalisation soar past Rs 1 lakh crore, bolstered by strong earnings, reduced provisioning, and declining NPAs.