Further, Crisil Ratings has reaffirmed its 'Crisil A1+’ rating on the short-term debt instruments of the bank.

Crisil Ratings stated that the revision in outlook factors in the gradual improvement in the earnings profile, stabilisation in the deposit franchise with increasing share of granular deposits, and the strategic shift in lending to relatively stable asset segments.

The bank reported profit of Rs 1,037 crore and return on assets (RoA) of 0.8% for the first quarter of fiscal 2027 (Rs 889 crore and 0.2%, respectively for fiscal 2026), driven by lower credit cost and better operating profit. Credit cost declined to around 1% for this period, from 1.5% for fiscal 2026.

Pre-provisioning profit (PPoP), as a percentage of average assets, has improved to 2.0% for the first quarter of fiscal 2027, as against 1.7% in fiscal 2026. Sustained improvement in profitability remains key monitorable.

With respect to the liability franchise, the bank has been reducing its reliance on high-cost deposits and focusing on more granular deposits. As a result, share of average retail deposits stood at 49.5% for the quarter ended June 30, 2026, as against 47.9% in the previous quarter.

This has also led to a drop in cost of deposits to 5.95%, from 6.07% for the previous quarter and 6.44% for the corresponding period of the previous fiscal. Sustained growth in retail deposits and improvement in the cost of deposits vis-à-vis peers remains monitorable for the bank.

On the assets side, the bank has adopted a balanced strategy and is focused on building a diversified loan portfolio across retail, SME and corporate loan segments. While it will leverage its strong presence in the vehicle finance and microfinance segments, it will also scale up secured asset classes, including home loans.

Further, the SME portfolio is likely to gradually build up and contribute 10–15% of the overall loan book over the medium term.

The ratings continue to reflect healthy capitalisation of the bank, with a high core equity ratio and adequate pre-provisioning profitability. However, these strengths are partially offset by the bank’s average asset quality and modest resource profile vis-à-vis peers.

IndusInd Bank is a new-generation private-sector bank. The bank has a pan-India presence, with around 6,560 branches and 2,853 automated teller machines (ATMs) as on 30 June 2026. It also has representative offices in Dubai, Abu Dhabi and London. It has four divisions: corporate and commercial banking, consumer banking, global markets group, and transaction banking.

The bank reported a 46.51% year-on-year (YoY) increase in standalone net profit to Rs 1,002.50 crore for the quarter ended 30 June 2026 (Q1 FY27), compared with Rs 684.25 crore in the corresponding quarter last year. The lender's total income, however, declined 9.19% YoY to Rs 13,095.30 crore during the quarter.

The scrip shed 0.15% to currently trade at Rs 1010.40 on the BSE.