IDBI Bank Q1 Net Rises 17% to Rs. 2,007 Crore; Asset Quality Improves, NIM Contracts

Strong earnings supported by higher other income and lower NPAs, but margin pressure weighs on stock performance.

IDBI Bank reported a 17% year-on-year rise in net profit at ₹2,007 crore for the June quarter (Q1FY26), as per results announced on July 21. Despite the growth in profit, a decline in net interest margin (NIM) to 3.68% from 4.18% last year kept investor sentiment cautious. The earnings were supported by a sharp jump in other income and a notable improvement in asset quality.

Check This: IDBI Bank Stock Price

Stock Reaction & Technical View

Shares of IDBI Bank were trading flat at ₹93.35 on the NSE as of 2:30 PM IST on July 21. Price action stayed muted despite strong bottom-line growth due to pressure on margins and moderation in interest spreads.

Technically, ₹96 is seen as a key resistance, while ₹89 acts as immediate support. The stock’s 14-day RSI is around 54, suggesting neutral momentum. No significant build-up was seen in F&O activity post-results, though delivery volumes picked up slightly.

“The earnings quality is decent, with strong operational performance. But softening NIMs may limit upside unless there’s a clear catalyst for margin expansion,” noted a banking analyst at JM Financial.

Also Read : India Among Most Active IPO Markets Globally, But Trails US and China in Proceeds

Earnings Highlights & Sectoral Read

Total income grew to ₹8,458 crore, up from ₹7,471 crore a year ago, supported by a 5% rise in interest income and a robust ₹1,437 crore in other income, nearly 80% higher YoY. Operating profit increased to ₹2,354 crore, even as total expenditure rose 13% to ₹6,104 crore, led by higher interest and operating expenses.

Notably, the bank recorded a net provision reversal of ₹179 crore, compared to ₹443 crore in Q1FY25, cushioning pre-tax profit at ₹2,534 crore.

On the asset quality front, gross NPAs improved to 2.93% from 3.87% YoY, while net NPAs declined to 0.21%, among the lowest in the sector. The provision coverage ratio (PCR) remained extremely high at 99.31%, and capital adequacy improved sharply to 25.39%.

Loan book expanded to ₹2.11 lakh crore, while deposits grew to ₹2.97 lakh crore, indicating healthy credit momentum.

Other PSU banking stocks, including Bank of Maharashtra and Indian Bank, traded flat ahead of their own Q1 results. The Nifty PSU Bank Index was up 0.2%, underperforming broader benchmarks.

Trading View & Watchlist

With strong capital buffers and improving asset quality, IDBI Bank is positioning itself well for sustained profitability. However, declining NIMs and rising costs will be key metrics to track in upcoming quarters.

Stocks to watch in the sector:

• IDBI Bank: Monitor ₹89–₹96 range for breakout or breakdown

• Indian Bank: Q1 earnings due; ₹564 is a resistance zone

• PNB: Technical consolidation near ₹104; watch for earnings surprise

Traders will also watch upcoming RBI commentary, rate transmission data, and credit growth trends across PSU banks for directional cues.

Also Check This:

• Indian Bank Stock Price
• PNB Stock Price