IndusInd Bank Q1 results—Corporate lending dips 6%, drags advances, deposits
What's the story
IndusInd Bank has reported a mixed performance for the first quarter of FY26, with both advances and deposits declining by around 3% quarter-on-quarter (QoQ). The bank's net advances fell to ₹3.34 lakh crore, largely due to a sharp 6.2% QoQ (14.4% YoY) decline in corporate banking. However, the consumer lending segment saw a marginal decline of 0.9% QoQ but an annual growth of 4.8%.
Deposit details
CASA ratio declines to 31.49%
IndusInd Bank's deposits also fell by 3.3% QoQ and 0.3% YoY, with retail and small business deposits remaining largely stable. The bank's current account savings account (CASA) ratio declined to 31.49% from 32.81% in the previous quarter, indicating a slight dip in the proportion of low-cost deposits in its overall deposit base.
Loan strategy
CD ratio remains stable at 84.2%
The decline in advances was mainly due to the bank's decision to sell off some of its corporate loans in a bid to maintain liquidity amid deposit outflows. Despite this, the credit-deposit (CD) ratio remained stable at 84.2%, slightly up from 84% in the previous quarter. This stability indicates that while both deposits and advances have decreased, they have done so at a similar rate.
Market response
Morgan Stanley maintains 'Underweight' rating
Morgan Stanley has maintained its 'Underweight' rating on IndusInd Bank with a price target of ₹750 per share. The brokerage cited a decline in high-margin loans and uncertainty around CEO succession as reasons for their stance. On the other hand, Jefferies has given a 'Buy' recommendation with a price target of ₹920 per share, citing stability in retail deposits despite overall deposit decline.