The GNPA/NNPA ratios are increased marginally to 1.13%/0.59% on YoY basis due to higher slippages from corporate and an additional contingent provisioning for IL&FS; exposure. We value the bank at 2.7x BV of FY21 and maintain our Hold rating with a...

Near term outlook: We expect the stock to remain range bound given the uncertainty surrounding the recognition of and provision for the IL&FS exposure. IIBs 3Q was characterized by robust business growth and healthy operating performance ( PPOP up 27/6% YoY/QoQ). NIMs were sequentially stable at ~3.8% (down ~16bps). Driven by treasury gains (2x QoQ), other income grew ~12%. CASA remained sequentially stable at ~44%, w/w SA dipped ~2% QoQ. Fees (% of loans) dipped by 10bps QoQ to 3%. While overall asset quality deteriorated sequentially, (GNPAs at 1.13%, ~Rs 19.7bn, +11% QoQ) the exposure to IL&FS; remained std (Rs 30bn). Even as IIB additionally provided ~Rs 2.55bn (total provisions ~Rs 6bn incl. floating provisions), it will have to incur further provisions of at least ~Rs 4bn toward the holdco exposure. Our constructive thesis on IIB remains unaltered as it continues to display strong growth and operating performance, which we expect will continue. While asset quality will be adversely impacted by its exposure to IL&FS;, in the near term; we expect IIB to be back on track to achieve RoAAs of 1.62% by FY21E post its acquisition of BAFIN. Maintain BUY with a TP of Rs 1,935 (3.5x Dec-20 ABV of Rs 553).

ff It made additional contingency provisioning to the tune of Rs2.6bn towards exposure to IL&FS; Holdco (exposure at Rs20bn), taking the total provisioning on this account to 30%. Further, haircuts could be ~40-50% on this exposure and the Bank will make additional...

The asset quality of the bank has remained nearly stable and healthy, while net interest margins (NIM) was also healthy at 3.83% in Q3FY2019. The non-interest income growth of the bank was strong driven by healthy growth for both core fee income as well as treasury income. Bank has recorded strong 35% growth in the loan book. Bank has strongly expanded network...

IndusInd Bank (IBL) reported its 3QFY19 results with the key takeaways being: (1) IBL took provision cover to IL&FS; parent exposure to ~30% and expects a cumulative provision requirement of 40-50% on this exposure to IL&FS; parent (2) NIM was largely flat, contracting 1 bp QoQ with management guiding for stable to improving margin (3) Corporate loan growth (ex MFI) at 34% YoY continued to outpace consumer finance growth at 28% YoY. (See detailed conference call takeaways from page 2) Per se, on the key P&L; items, IBL delivered NII, PPOP and PAT growth of 21%, 27% and 5% YoY to Rs22,881mn, Rs21,170mn and Rs9,850mn, respectively. We have retained Buy rating on IBL and revised our target price to Rs2,107 (from Rs2,139 earlier)....

Asset classification of IL&FS; has been kept Standard'. However, the bank continued to make additional contingency provisions of ~| 255 crore in Q3FY19 (| 275 crore in Q2FY19). Accordingly, total provision in relation to exposure to IL&FS; is nearly | 600 crore Higher provision continued to impact earnings with PAT growth of 5% YoY to | 985 crore. Excluding contingent provision, PAT grew higher at ~23% YoY. Q4FY19 provisions to stay higher due to IL&FS; Business growth remained strong. Healthy growth in auto portfolio...

IndusInd Bank's (IIB) Q3FY19 PAT grew 5.2% YoY to Rs 9.9bn driven by 21%/24% growth in NII/non-interest income. Higher corporate slippages caused GNPAs to inch up to 1.13%. IIB made additional contingent provisions towards its Rs 20bn exposure to the IL&FS; holdco which increased its coverage to 30%; management plans to raise this to 40-50% ahead. Overall PCR dropped to ~48% as fully provided NPAs worth Rs 3.5bn were written...

Momentum in balance sheet growth has further picked up with loan growth of 35% driven by across segments. While NII growth of 21% is in line with our expectations, PAT growth of 5% is tad above our expectations. While ILFS exposure of Rs30bn is still standard, bank has made standard asset provision of Rs2.5bn during the quarter in addition to Rs2.8bn made during last quarter. We have cut our earnings by 5% for FY19, factoring in additional provision for ILFS in Q4. We retain our BUY rating with a TP of Rs1,935 (Rs1,980 earlier)...

9 January 2019 IndusInd Banks (IIB) PAT grew by a muted 5% YoY to INR9.8b in 3QFY19 due to contingent provision of INR2.55b (toward infra group). NII grew 21% YoY, while NIM was largely flat at 3.83% on account of a rise in cost of funds. Total income increased 22% YoY on the back of healthy other income growth of 24% YoY. Core fees grew 18% YoY, led by higher forex income and loan processing fees. Opex growth (+16% YoY) trailed total income growth, resulting in robust 27% YoY growth in PPoP. Loan growth came in at 35% YoY, led by robust growth in the corporate segment. Consumer portfolio grew 28% YoY (+7% QoQ), led by strong traction in CV loans, equipment financing and credit card segments. The share of retail loans in total book stands at 39% (45% including business banking). MFI book stood at INR75.2b (4.34% of loans).

IIB's earnings of Rs9.85bn (PLe: Rs9.96bn) was largely in-line with estimates but PPOP of Rs21.2bn (PLe: Rs20.8bn) beat estimates on strong treasury gains. It continued to make contingent provisions of Rs2.5bn (Rs2.75bn in Q2FY19) on IL&FS; exposure, taking total provisions to >Rs6.0bn (30% PCR). Management guided that there could be some acceleration in provisions ahead to get PCR to desired level of 40-50% as clarity on haircut & asset cover on holdco is emerging, while there could be classification towards NPA ahead as account is in SMA1&2. Operationally bank continues to cruise smoothly...

Bank's GNPA/NNPA ratios are almost stable at 1.09%/0.48% on YoY basis. Earnings are expected to sustain a healthy growth of 27% CAGR on the back of robust loan growth at 28% CAGR. We value the bank at 2.8x of P/BV of FY20 per share and maintain our Hold...

Sun Pharma Ind: Dual play on US Recovery & growth in IPM, Resolution of Halol plant a key trigger; IndusInd Bank: Consistent track record, Strong Q2 performance, Clarification from management

Advances recorded a growth of 32% YoY, while deposits grew by 19% YoY. Consumer finance growth stood at 29% YoY & 6% QoQ and corporate loan book grew at 35% YoY & 10% QoQ. On the deposits front, the CASA grew by 23% YoY and...

However, the bank has continued to maintain strong asset quality, while reduced its GNPA and NNPA ration in Q2FY2019. The bank has maintained healthy growth in net interest income as well as core fee income. Bank has recorded strong 32% growth in the loan book. Bank has strongly expanded network strength adding new 56 branches in Q2FY2019, raising the branch count to 1466 branches at end September 2018. CASA deposits ratio improved to 43.6% end September 2018. On the other hand, the bank has witnessed marginal decline in the net interest margins (NIM) to 3.84%....

PAT of the bank showed subdued growth of +5% yoy (-11% qoq). Largely numbers were in-line in terms of growth and operational efficiency; however, there was a miss on the credit cost & margins. During the quarter, the bank made 2.75 bn contingent provisions for IL&FS; Group exposure, however, account still remains standard in the books of the bank. The bank has proactively created this provision buffer, though future provisions would be determined by...

IndusInd Bank (IIB) reported a strong operational performance with advances growth of 32% yoy/8% qoq, led by robust traction in both corporate banking (+35% yoy/10% qoq) and consumer finance (+29% yoy/+5.6% qoq). Despite the above-industry growth, IIB witnessed NIM compression; contracted by 6 bps qoq/8 bps yoy to 3.94% resulting in NII growth lagging at 21% yoy/4% qoq. 25 bps increase in cost of funds qoq was disproportionately larger, offsetting 13 bps increase in advances yield. However, as re-pricing of the back-book catches up, we expect NIM pressure to subside. Opex at INR 15.3 bn grew 11% yoy/1% qoq translating into C/I of 43.4% (-80 bps qoq, -230 bps yoy). Despite strong PPOP growth of 22% yoy/4% qoq to INR 20 bn, heavy provisioning weighed down on bottom-line profitability. Provisioning at INR 5.9 bn (including INR 2.8 bn towards ILFS) translated into credit costs of 102 bps (vs. 63 bps average for preceding 5 qtrs). The bank continued to improve on its asset quality with GNPAs at 1.09%, down 6 bps qoq / NNPAs at 0.48%, down 3 bps qoq. Net accretion to GNPAs during the quarter was INR 0.4 bn (11 bps net slippage). Capital...

Momentum in balance sheet growth has further picked up with loan growth of 32% driven by across segments. While NII growth of 21% is in line with our expectations, PAT growth is muted at 5% (12% below expectations). Lower PAT is attributable to oneoff standard asset provision of Rs2.8bn made towards its exposure towards IL&FS; group. Asset quality has been stable and has been one of the best in the sector. We...

IndusInd Bank (IBL) reported its 2QFY19 results with the key takeaways being: (1) IBL made nonmandatory contingent provision worth Rs2.75bn on exposure to IL&FS; Group (2) NIM contracted 8bps QoQ as rise in yield continued to lag rise in cost of funds (3) Corporate loan growth at 35% YoY continued to outpace consumer finance growth at 29% YoY. Per se, on the key P&L; items, IBL delivered NII, PPOP and PAT growth of 21%, 22% and 5% YoY to Rs22,033mn, Rs19,924mn and Rs9,203mn, respectively. We have revised our NII, PPOP and PAT estimates, retained Buy...

ICICI Securities Ltd | Retail Equity Research Business growth remained strong. Advances increased higher than our estimate at 32.4% YoY (highest in last several quarters) to | 163144 crore while deposit grew 18.9% YoY to | 168219 crore Margins stayed at strong levels of >3.8%. NII maintained healthy growth trend of 21% YoY to | 2203 crore Asset quality stayed steady QoQ. The GNPA ratio improved to 1.09% vs. 1.15% QoQ while the NNPA ratio fell 3 bps QoQ to 0.48%...

Maintain BUY with a TP of Rs 1,954 (3.5x Sept-20 ABV of Rs 558). Barring the optical blip in net earnings (hit by proactive provisions of Rs 2.75bn towards an Infra group), it was business as usual for IIB. Positives from the qtr are (1) Broad based loan growth of ~32%, even after sell downs, (2) Healthy SA accretion (+7% QoQ), (3) Controlled opex growth of a mere 11/1%, (4) Steady fee growth of ~20% and (5) Stable asset quality with lower slippages. NIMs dipped (3.84%, -8bps QoQ) for the 4th consecutive qtr, given the higher proportion of fixed rate book and relatively higher increase in CoF.