IndusInd Bank’s shares slipped more than 6% to Rs 1,150 per share on the BSE on Thursday, a day after the bank announced its Q2 earnings. IndusInd Bank was driven by a healthy rise in loan disbursement and net interest income. Sequentially, the private sector lender’s net profit rose 11% from Rs 1,631 crore in April-June quarter. Operating profit grew 10% year-on-year and 3% sequentially to Rs 3,554 crore.

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At 02:08 pm, IndusInd Bank traded 4.67% lower at Rs 1,161, as compared to a 0.36% decline in the S&P BSE Sensex. It has touched an intraday high of Rs 1,217 and an intraday low of Rs 1,150.45. Despite today’s decline, in the last three months, the stock has outperformed the market, rising 35%, as compared to 7.6% in the Sensex.

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Provisions decreased 33% year-on-year to Rs 1,141 crore in the reported quarter from Rs 1,706.9 crore in the corresponding quarter of the last financial year. It fell 8.7% sequentially from Rs 1,250.9 crore in April-June quarter.

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Asset quality of the bank has improved with the Gross NPA improving to 2.11% year-on-year from 2.77% in the same quarter of previous financial year. The value of Gross NPA was Rs 5,567 crore, down 10.8% year-on-year from Rs 6,245 crore in the year-ago period and 6.6% down from Rs 5,932.9 crore.

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The lender’s loans rose 18% year-on-year and 5% quarter-on-quarter to Rs 2,60,129 crore in September quarter. Deposits went up 15% YoY and 4% QoQ to Rs 3,15,532 crore in the quarter under review.

The bank’s CASA has increased 15% YoY and 2% QoQ to Rs 1,33,525 crore, while the term deposits jumped 15% YoY and 6% QoQ to Rs 1,82,007 crore.

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The global research firm JP Morgan has retained an overweight rating on IndusInd Bank and has raised target to Rs 1,400 from Rs 1,250 per share. The brokerage firm believes that NIM expansion is relatively lower than other banks. “Q2 gives confidence on the Bank coming back to normalised RoE of 15-16% by FY24/25 while valuations remain undemanding,” said the firm.

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Indian banks are expected to report strong numbers for the second quarter as lending increased even amid a slew of central bank rate hikes. Last week, top private bank HDFC Bank reported a 20% rise in profit for the second quarter.