The net profit was in line with Street estimates. A Bloomberg consensus estimate was Rs 1,610 crore. However, it was three per cent lower than the Rs 1,667 crore in the June-ended quarter.

A positive surprise, say analysts, was the asset quality.

The growth in profit was also limited by higher provisioning, up 87.5 percent to Rs 725 crore in the quarter as compared to the June-end one.

This was despite the fact that at the end of the second quarter, the gross and net non-performing ratios (NPA) ratios remained unchanged at 1.34 per cent and 0.44 per cent, the same as at the end of June.

In absolute terms, though, gross NPA were up 4.3 per cent sequentially. They were also distinctly higher than at the end of the same quarter last year, Rs 3,613 crore against Rs 2,734 crore. Recoveries and upgrades were Rs 164 crore and write-offs were Rs 597 crore.

The bank has said it expected a gross stress addition of Rs 6,500 crore for FY15, of which Rs 2,700 crore was in the first half. Sanjeev K Gupta, executive director (corporate centre) said it did not sell any bad loans to asset reconstruction companies in the quarter.

The results came after market closed. On Friday, the stock ended with gains of 2.04 per cent at Rs 402 on the BSE.

Net interest income, the difference between the interest earned and expended, was up 20 per cent to Rs 3,525 crore in the quarter as compared to Rs 2,937 crore in the same period last year.

Other income in the second quarter grew 10 per cent to Rs 1,948 crore as against Rs 1,766 crore during the same period last year.

Net interest margin (NIM) for the September ended quarter was at 3.97 per cent, up from 3.88 per cent recorded at the end of the June quarter. “Margins improved as the yield on advances rose by over seven basis points, over the year. The share of retail deposits has also gone up. As the cost of funds has gone down, we expect to maintain our margins around 3.5% for the year,” said Gupta.

The share of current and savings account deposits was 40 per cent of the total at end-September. The capital adequacy ratio was 14.84 per cent (excluding the net profit for the first two quarters of this financial year), according to Basel-III norms. The Tier-I capital adequacy ratio was 11.51 per cent.

Rahul Shah,Vice President -Equity Advisory Group, Motilal Oswal Securities said that the results have been in line with estimates. “Operating leverage with incremental branches being opened in semi-urban and rural areas will be a key thing to watch out for. Also, repatriation of profits from international subsidiaries can aid earnings.”