IndusInd Bank Shares Drop Over 3% Following Q4 FY25 Business Update

Shares of IndusInd Bank fell over 3% on Monday, April 7, 2025, after the private sector lender released a mixed set of operational metrics for the fourth quarter of FY25. While the bank posted moderate year-on-year (YoY) growth in advances and deposits, sequential performance was weaker, especially in corporate lending.

Advances Up Year-on-Year, but Sequential Decline Raises Concerns

In its Q4 FY25 business update, IndusInd Bank reported net advances of ₹3.47 lakh crore, reflecting a 1.4% YoY growth, but a 5.2% decline quarter-on-quarter (QoQ). The sequential drop in advances signals a slowdown in lending momentum towards the end of the fiscal year.

The bank’s corporate banking segment saw notable weakness, with net advances contracting 4.9% YoY and 15.1% QoQ. However, its consumer banking segment performed better, recording a 6.3% YoY and 3.4% QoQ increase in net advances.

CASA Ratio Deteriorates Despite Steady Deposit Growth

Total deposits at the end of March 2025 stood at ₹4.11 lakh crore, marking a 6.8% YoY and 0.4% QoQ increase. However, the Current Account Savings Account (CASA) ratio slipped sharply to 32.8%, down from 37.9% a year ago and 34.9% in the previous quarter, indicating a shift towards more expensive term deposits.

Retail and small business deposits also saw a marginal decline, standing at ₹1.85 lakh crore as of March 31, 2025, compared to ₹1.88 lakh crore at the end of the December quarter.

Liquidity Position Remains Healthy

Despite operational challenges, the bank maintained a comfortable liquidity profile. The daily average Liquidity Coverage Ratio (LCR) for Q4 FY25 stood at 118.4%, with the LCR as of March 31, 2025, rising to 136.2%—well above regulatory requirements, suggesting adequate buffers to meet short-term obligations.

Stock Performance 

On April 07, 2025, IndusInd Bank share price traded 3.94% lower at ₹655.35 at 9:45 AM (IST). IndusInd Bank’s share price reached a 52-week high of ₹1,576.00, and a 52-week low of ₹605.40. As per BSE, the total traded volume for the stock stood at 2.68 lakh shares with a turnover of ₹17.52 lakhs.

According to exchange data, IndusInd Bank shares are trading at a price-to-earnings (P/E) ratio of 7.06x, based on its trailing 12-month earnings per share (EPS) of ₹92.75, and a price-to-book (P/B) ratio of 0.78.

Conclusion

While the consumer banking division continues to show resilience, the pressure in the corporate loan book and declining CASA ratio present challenges for IndusInd Bank. Investors appeared cautious following the update, reflected in Monday’s stock price correction, as the bank navigates growth headwinds and shifting deposit dynamics in a competitive lending environment.

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