IndusInd Bank eyes FY27 growth reset after crisis-hit year as profit returns in March quarter

MUMBAI: IndusInd Bank expects to return to industry-aligned growth in FY27 after a year of repair work following accounting issues in its derivatives portfolio and stress on its microfinance book, managing director and CEO Rajiv Anand said on Friday.

“We have put the derivatives issue behind us and it is fully accounted for. We are guiding that 2026-27 will be a transition period to a growth mindset and we believe this should be the year where we start growing broadly in line with the market, both in terms of assets and liabilities,” Anand said in the March quarter earnings conference call.

The bank’s loan book fell 8% year on year in the quarter ending March. ₹Deposits decreased by 3% to 3.15 trillion ₹3.99 trillion. A sharp decline in provisioning and improvement in asset quality helped the bank return to profit.

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Net profit realized so far ₹594 crore compared to the loss ₹2,329 crore a year ago. December quarter profit after tax announced ₹128 crore.

The recovery follows a difficult period when accounting inconsistencies in the derivatives portfolio and stress on the microfinance ledger eroded investor confidence and triggered leadership changes. Former managing director Sumant Kathpalia and deputy managing director Arun Khurana left the job as the bank undertakes governance and risk control fixes.

Anand, who was appointed managing director and chief executive officer in August 2025, said the focus remains on calibrated expansion. “We are consciously prioritizing prudence over speed, ensuring that growth is aligned with risk-adjusted returns rather than short-term expansion,” he said in a statement against the backdrop of the ongoing war in West Asia.

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Private banks have remained cautious about near-term growth prospects, with HDFC Bank and ICICI Bank refraining from giving guidance last week.

On April 20, Mint Although domestic demand trends have remained strong so far, war-related tensions have clouded visibility on future growth and lending, particularly to small and medium-sized businesses and export-oriented companies.

Sashidhar Jagdishan, managing director and chief executive officer of HDFC Bank, said in the post-earnings press conference on April 18 that although expansion is expected to continue, it will be difficult to predict the future pace of growth given the war.

Anand said IndusInd Bank is not currently seeing a material impact on its loan portfolio, but added that prolonged disruption could impact certain sectors, especially those dependent on physical oil and gas resources such as ceramics and fertilisers.

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He said large companies are likely to remain resilient due to their strong balance sheets and low leverage, while medium-sized companies and small and medium-sized businesses are more exposed to external shocks.

Anand said collections in the microfinance portfolio have stabilized, overdue receivables have decreased sharply and new slippages are lower.

“With this stability in place, we have begun to gradually scale payment and expect next year to be a calibrated growth rather than a contraction in this segment,” he said.

Bank’s microfinance book falls 42% year on year ₹16,782 crore at the end of the March quarter.