IDBI Bank Q2 Results October 17: Profit Falls 39% on NSDL Base, Core Profit Up 14%

The IDBI Bank Q2 results October 17 headline says net profit fell 39%. That number is accurate, but it tells you more about last year than this one. Strip out a one-time gain from a year ago and the bank’s profit actually grew, while its margin widened sharply.

IDBI Bank Q2 results October 17: the main numbers

The board approved the numbers for July to September 2026 on Saturday, and the bank filed its results press release with BSE and NSE. All figures are in rupees crore. Unless stated otherwise, growth figures compare Q2 FY27 with Q2 FY26.

• Net profit: ₹2,205 crore, down 39% from ₹3,627 crore, and up 4% from ₹2,115 crore in Q1 FY27.
• Net interest income (NII): ₹4,228 crore, up 29% from ₹3,285 crore, and up 21% quarter on quarter.
• Net interest margin (NIM): 4.11%, against 3.71% a year ago and 3.61% in the June quarter.
• Operating profit: ₹2,893 crore, down 18% from ₹3,523 crore, and up 33% from ₹2,168 crore in Q1.
• Non-interest income: ₹1,353 crore, down 46% from ₹2,489 crore.

Why the 39% fall looks worse than it is

In the September 2025 quarter, IDBI Bank booked a one-off gain of ₹1,699 crore from selling its strategic investment in NSDL. That gain inflated both other income and profit a year ago, so the comparison now looks ugly. The bank says that once you exclude the gain, net profit rose 14% and operating profit rose 59%. On that basis, year-ago net profit was ₹1,929 crore and operating profit was ₹1,824 crore, as Business Standard reported.

We think the cleaner story is in lending income. Interest income rose 20% to ₹8,512 crore, and the cost of deposits slipped to 4.55% from 4.69% a year ago. When a bank earns more on its loans and pays slightly less for its money, the margin widens. That’s what happened here.

Take away last year’s NSDL gain and profit grew 14%, with the margin at 4.11%.

Loans, deposits and bad loans

Deposits grew 17% to ₹3,55,684 crore and net advances grew 18% to ₹2,71,533 crore. CASA deposits, the cheaper current and savings account money, rose 12% to ₹1,55,877 crore. The CASA ratio, though, fell to 43.82% from 45.79% a year ago, because term deposits grew faster. Retail made up 69% of gross advances and corporate loans the other 31%.

Asset quality got a little better again. The gross NPA ratio fell to 2.12% from 2.65% a year ago and 2.30% in June. Net NPA was 0.17%, against 0.21% a year earlier and 0.16% in June, so it barely moved over the quarter. Provision coverage, which counts technical write-offs, stood at 99.24%.

The bank has plenty of capital. Its capital adequacy ratio was 27.10%, against 25.39% a year ago, and its common equity tier-1 ratio was 26.55%. Return on assets was 1.83%, close to the 1.89% the bank reports for the year-ago quarter once the NSDL gain is taken out.

What to watch on Monday

The results came out on a Saturday, so Monday’s session will show how the market reads them. One weak spot is the cost-to-income ratio. It improved to 48.17% from 52.02% in June, but it’s well above the 38.99% of a year ago, when the NSDL gain lifted income. For background on the bank’s ownership, see our earlier piece on the IDBI Bank stake sale. To see how another lender fared in the same weekend’s results, read our Yes Bank Q2 results summary. Our guide on how to analyse quarterly results of a company explains how to separate one-offs from the core business.

This article is a news summary for information only and is not investment advice. Please consult a SEBI-registered adviser before making investment decisions.