IndusInd Bank Ltd. share price forecast

We expect IndusInd Bank (IIB) to further build on the 1.7% RoA and 13.4% RoE delivered in Q1FY23, thereby reaffirming our confidence in its ability to deliver >5% PPoP / loans, 1.7% / 1.9% RoAs and 15% / 16% RoEs by FY23E / FY24E respectively.

AU Small Finance Bank: AUBANK's earnings were in line with estimates, led by stronger asset yields, offset by sustained elevated operating expenses. Asset quality was stable with GNPA/credit costs at 2/0.4% (annualised), while slippages were marginally higher at 2.5% with delinquencies from the restructured pool (now at 2.1% of loan book). Business momentum remained healthy, driving AUM growth of +37% YoY, with traction in the wheels' segment (+44% YoY). AUBANK continued to step up investments in its franchise-building blocks and new asset classes, which are likely to drag medium-term profitability metrics (opex to assets at ~4% and cost to income ratio at ~60%). We adjust our FY23E/FY24E estimates downwards by 5/3% to factor in higher opex and maintain REDUCE with a revised TP of INR600 (3.8x Mar'24 ABVPS). Wipro: Wipro's (WPRO IN) margin goalpost timelines have moved ahead with investments to maintain' the current growth trajectory. Q1 performance was a slightly lower revenue (although consistent at mid-point of the guided band) and delivered lower margins. Key positives include: (1) strong large deal bookings with 18 large deals of TCV USD 1.1bn (vs. USD 2.3bn in FY22) aiding growth visibility with overall TCV/ACV growth of 32% and 18% YoY; (2) continuity of organic growth consistency with Q2 guidance of 3-5% QoQ CC (organic 1.8-3.8%), supported by recent wins (Petrobras, Credit Agricole, Scania) and commentary of all-time high deal pipeline as well as recent outperformance on large account trend; (3) stronger growth in headcount relative to peers with fresher hiring momentum (10k in Q1FY23 and 30k targeted in...

Strong all-round performance

IndusInd Bank (IIB) demonstrated 1.7% RoA and 13.4% RoE in Q1FY23, thereby, reaffirming our (above the consensus) confidence of it being able to deliver >5% PPoP/loans, 1.7%/1.9% RoAs and 15%/16% RoEs by FY23E/FY24E, respectively.

Tanla Platforms: Tanla reported a muted quarter, with both revenue and margin coming slightly below our estimate. Revenue was down 3.6% QoQ due to softness in the enterprise business (-4.2% QoQ), offset by better platform performance (+4.4/48.7% QoQ/YoY). The platform business (currently Trubloq) will continue to deliver strong growth, with the launch of Wisely platform. The two notable deals on the Wisely platform (Vodafone Idea and Truecaller business messaging partnership) provide revenue visibility. The gross margin profile of the company will improve, with increasing contribution from the higher margin product business. The enterprise business, which was hit by seasonality and softness in top accounts, will recover, led by addition of new customers. We expect the enterprise business to clock 15% volume growth and the GM will be in the 20-21% range, led by higher investments and increasing competition. The platform business will clock 35% revenue CAGR with 90% GM. We maintain our EPS estimate and assign a BUY rating with a TP of INR 1,900, based on 35x FY24E EPS, supported by growth (~20%) and RoE of >45%. IndusInd Bank: IndusInd Bank (IIB) reported a 5% miss on earnings estimates due to a higher-than-expected credit cost and soft loan growth. Gross slippages, although sequentially lower, clocked in at ~4%, mainly from the CBG portfolio, while MFI saw healthy collection efficiency at 99% in Mar-22. Credit costs inched up as IIB witnessed slippages from the restructured book and chose to maintain its contingency buffer at 1.4% of loans. During the quarter, IIB reported strong disbursements across most...