IndusInd Bank's net profit for the quarter ending September 2024 dropped by 39%, falling short of street estimates. Analysts attribute this decline to rising operating expenses and a slower growth in loan growth. Despite this, the bank remains optimistic about its performance in the second half of the fiscal year, citing growth in microfinance and vehicle finance portfolios. However, experts have downgraded the stock to 'Hold' and anticipate an overhang in the near term.
IndusInd Bank Shares Tumble Amidst Declining Net Profit and Concerns
IndusInd Bank, a leading private sector bank in India, has witnessed a downturn in its financial performance, sending its shares into a downward spiral. The bank's net profit for the quarter ending September 2024 has dropped by a significant 39%, failing to meet market expectations.
Reasons for the Decline
Analysts have attributed the decline in net profit to two primary factors:
Bank's Optimism and Analyst Downgrade
Despite the challenging results, IndusInd Bank remains optimistic about its future performance. The bank highlights its strong growth in microfinance and vehicle finance portfolios, which it expects to drive growth in the second half of the fiscal year.
However, experts have taken a cautious stance, downgrading the bank's stock to a "Hold" rating. They anticipate a near-term overhang on the stock due to the disappointing quarterly results and concerns over operating expenses and loan growth.
Background
IndusInd Bank has had a turbulent history in recent years. In 2018, the bank's former CEO, Romesh Sobti, resigned amidst allegations of financial irregularities. The bank subsequently faced a regulatory probe, which cast a shadow over its reputation.
Despite these challenges, IndusInd Bank has remained one of the largest private sector banks in India, with a significant presence in retail, corporate, and commercial banking. The bank has a strong brand and a loyal customer base.
Top 5 FAQs
1. Q: Why has IndusInd Bank's net profit dropped? A: The decline in net profit is attributed to rising operating expenses and slower loan growth.
2. Q: Is the bank concerned about its performance? A: Despite the disappointing results, the bank remains optimistic and expects to see growth in the second half of the fiscal year.
3. Q: Has the bank's stock price been affected? A: Yes, IndusInd Bank's stock has fallen in value after the announcement of the quarterly results.
4. Q: What is the outlook for the stock? A: Analysts have downgraded the stock to a "Hold" rating due to concerns over operating expenses and loan growth.
5. Q: What are the challenges facing IndusInd Bank? A: The bank is facing challenges related to rising costs, slower loan growth, and potential reputational damage from past controversies.
In an effort to reduce reliance on China for key minerals used in advanced technologies, India is exploring partnership with a rebel group in Myanmar to secure rare earth samples. The Ministry of Mines has directed state-owned and private companies to collect samples from Kachin Independence Army-controlled mines and test them in domestic labs. This move comes in light of China's recent export restrictions on rare earth magnets, causing disruptions in global supply chains.
Oracle chairman Larry Ellison, who hails from the Bronx, has surpassed Tesla CEO Elon Musk as the richest person in the world with a net worth of $405 billion. This jump in wealth was reported by Barron's on Wednesday, putting Ellison ahead of Musk's net worth of $390 billion. This milestone marks a shift in the top spot amongst the world's wealthiest individuals.
The US Producer Price Index fell 0.1% in August, bucking expectations of a rise and indicating a potential slowdown in overall economic growth. The decline was driven by a slump in the cost of services, particularly within wholesalers and retailers. The news has led to a drop in Treasury yields and solidifies expectations of an interest rate cut by the Federal Reserve next week.
The Hilton Kathmandu, once a symbol of Nepal's ambition and modern design, recently fell victim to violent anti-government protests. The hotel, built by the Shanker Group with a significant investment and featuring luxurious amenities and seismic safeguards, opened in 2024 but tragically, went up in flames a year later. The Hilton was not just a hotel, but a cultural statement, embodying Nepalese heritage and offering breathtaking views of the Langtang range.
In a shocking incident, a brand-new Mahindra Thar crashed through a glass wall and landed on the road below in Delhi's Preet Vihar. The SUV had just been purchased by a couple who were inside the vehicle at the time with a showroom salesman. Fortunately, no one was seriously injured in the accident. The incident, captured on video, has gone viral on social media. Police are investigating the cause of the incident.
Delhi-based manufacturer Vikas Ecotech has acquired an existing Plasticizer Manufacturing Business, valued at Rs 270 million, in an all-cash deal. With this acquisition, the company aims to enhance its product offering and become debt-free by 2023-24. This move comes after the firm recently paid off Rs 101 crore of its debt to lenders.
The Indian Express has obtained information that the Registrar General of India has requested a budget of Rs 14,618.95 crore for the upcoming Census 2027. This will be the first "digital census" and will include the collection of caste data through dedicated mobile applications. The option for self-enumeration will also be provided to the public. Additionally, Indian refiners have saved approximately $12.6 billion in the past three years through their Russian oil imports, which has caused tensions with the Trump administration.
The Trump administration's latest move has caused major disruptions in the Indian export industry with the imposition of 50% tariffs on Indian goods. Sectors such as apparel, textiles, gems, and jewelry will bear the brunt of the higher tariffs, putting low-skilled jobs in India at risk. India's response has been to extend tariff exemptions on cotton imports, but many are criticizing the government for not taking strong action against the US. Political figures like Saurabh Bhardwaj and Akhilesh Yadav have slammed the BJP-led government for its failed foreign and economic policies which are negatively impacting traders, manufacturers, and workers.
The highly anticipated 2025 model of the popular Suzuki Access 125 has finally been unveiled at the Auto Expo. While it comes in three variants and boasts 5 different colour options, there are complaints about the fluctuating mileage and poor design choices such as fixed mirrors. With tough competition in the two-wheeler market, Suzuki may need to offer attractive deals to customers to stay ahead.
At the Plumbex India exhibition, Minister Hardeep S Puri launched the BHARAT TAP initiative, which aims to improve products and services related to plumbing, water, and sanitation. In his speech, Puri emphasized the importance of sanitation in India's development and praised the success of the Swachh Bharat Mission and AMRUT in achieving 100% toilet coverage in rural areas and significant progress in urban areas. He also announced the launch of AMRUT 2.0, with an outlay of Rs. 2,77,000 crores, to further strengthen water and sanitation services in cities.