The 51 reports from 18 analysts offering long term price targets
for IndusInd Bank Ltd. have an average target of 931.44. The consensus estimate
represents an upside of 51.90%
from the last price of 613.20.
is better placed to combat COVID and build a granular portfolio with sustainable growth. Additionally capital raise (32.9bn in 1QFY21 & 25bn in 2QFY21) will further boost the balance sheet. The pointers which acknowledge our conviction being: 1) Contingent provisioning (COVID + standard + floating & others) stood 1.2% of net advances and total provisioning (including cumulative) is at 2.5% of book, 2) Moratorium at 16% of the book is likely to reduce further, 3)...
The bank said 16% of the book (including MFI) was under moratorium as on June 2020 as compared to low single digits of morat book during March 2020. In addition, the bank said 90% of Moratorium 2.0 is derived from Moratorium 1.0 with 90% of the Morat 2.0 book being secured. In terms of morat breakup, 19% of retail book (~| 22200 crore) and 9% of corporate...
Cautious on lending, focusing on balance sheet granularity IndusInd Bank (IIB) reported operating profit growth of 13% YoY and 2.5% QoQ on the back of 16.4% YoY and 2.5% QoQ growth in NII and decline in opex (down 1% YoY, 11.4% QoQ) even as the loan book contracted by 4.2% QoQ. On YoY basis, the loan book grew by 2.4%. The strong NII growth came on the back of a healthy NIM of 4.28%, which expanded by 23bps YoY and 3bps. This is despite the fact that the balance sheet liquidity increased significantly. Deposit inflows were good as indicated by 5.3% QoQ growth, though the focus remained on accreting granular retail deposits by offering a higher rate. Going forward, the strategy is to improve balance sheet...
28 July 2020 IndusInd Bank (IIB) reported a stable quarter as lower fee income and higher provisions (credit cost of 4.5% annualized) impacted earnings. On the other hand, lower opex and modest improvement in margins were a surprise. PCR improved to 66.6%, while the bank increased the COVID-19 provisioning buffer to INR12b. Loan growth remains under pressure, while deposit growth is showing signs of stabilizing. The moratorium book has also declined to ~16% at Jun20-end from ~50% as of Apr20-end; the bank suggested GNPA / credit cost impact of 92b/65bp due to COVID-19. We largely maintain our estimates as softness in other income is compensated by lower opex and provisions. Maintain IIB reported PAT of INR5.1b (-64% YoY/+62% QoQ), affected by lower fee income and higher provisions of INR22.64b (credit cost stood at 4.5% annualized). The increase in provisions was on account of the bank creating INR9.2b COVID-19 provisions. NII grew 16% YoY to INR33.
IndusInd Bank has recorded sharp decline in the net profit to Rs 301.84 crore in the quarter ended March 2020 (Q4FY2020) from Rs 1300.20 crore in the previous quarter and Rs 360.10 crore in the corresponding quarter of last year, due to sharp increase in provisions. The fresh slippages of loans remain elevated leading to sharp increase in provisions for bad debt to Rs...
IIB may face serious near-term challenges- (1) asset quality risks stemming from its exposure to risky sectors (microfin., telecom, NBFCs, CRE etc.) and (2) scaling its granular deposit base. Higher provisions on anticipated stress will dent RoE. Together with heightened systemic risk, these underpin our measly assigned multiple (1x FY22E ABV). IIBs 4QFY20 net earnings (-76.8% QoQ) were below estimates (-20%), due to higher provisions. The rise in GNPAs was limited by higher w/os. Sequential NIM improvement was a positive surprise. Maintain ADD with a TP of Rs 575 (1xMar-22E ABV of Rs 575).
IndusInd Bank saw strong operational performance for the March quarter with revenue growing 32% driven by NII growth of 45% and fee income growth of 14%. It saw NIM improvement of 10 bps QoQ driven by fall in cost of deposit. It saw improvement in its cost to income ratio which resulted in strong operating growth of 38%. Loan book grew by 11%...
The management had recognised exposure of | 961 crore as fraud in Q3FY20, to be provided through P&L; account in four quarters. Consequently, the bank has recognised | 240 crore in Q3FY20, | 240 crore in Q4FY20. Remaining, | 480 crore is to be provided in next two quarters. The bank has provisioned | 75 crore for a stressed telecom exposure. To shore up provision coverage amid Covid-19 uncertainty, floating provision of | 260 crore was been created. The bank said advances in low single digit opted for moratorium. Such exposure was at ~| 460 crore while 5% has...
IndusInd's deposit growth declined to 4%YoY in Q4FY20 (23% Q3FY20) due to outflows in government deposits (75%) and corporate deposits (25%) was a worrisome. However, Rs.60bn accretion in first 2 weeks of April and guidance of strong sequential growth of deposits in Q1FY21 could be seen as positive. NII grew by 45% YoY with a 14% YoY growth in its other income. Consolidated PAT decline by 12% YoY due to higher provisions (up 56% YoY) including floating provisions of Rs.2.6bn on Covid-19. GNPA increased to 2.45% vs 2.19%; however NNPA declined to 0.91% vs 1.05% due to accelerated provisioning. Bank's SMA1 & 2 exposure declined to 0.69% vs 1.17% (QoQ) of loan book. We largely maintain our estimates for FY21. We retain...
IIB's earnings of Rs3.0bn (PLe: Rs3.3bn) were in-line with expectation as bank made high provisions to improve its PCR to 63% from 53% sequentially, which was lagging behind peers. Slower earnings trajectory was also on back of Rs5.5-6.0bn of higher provisions for potential COVID impact & on stressed telecom sector. Overall PPOP performance was better with strong NII led by expansion in NIMs of 10bps sequentially, contrary to expectations, while opex control also helped. With IIB's diversified book it is vulnerable to weak macroeconomics and could see higher prolonged stress. In view with this,...
28 April 2020 IIBs results reflect asset quality pressure with elevated slippages at INR20.6b, which resulted in a sharp spike in credit cost to 4.7% annualized (240bp for FY20). PCR, thus, improved sharply (2,030bp) during FY20 to 63.3%. Further, business growth remained sluggish in the corporate/CV portfolio while margins expanded owing to continued improvement in the asset mix. Management has suggested GNPA impact of 80bp due to the COVID-19 pandemic and created floating provisions of INR2.6b during 4QFY20. Due to better-than-expected core operating performance and an improving credit cost outlook, we have revised our PAT estimates by 10%/3% for FY21/FY22E. Maintain 4QFY20 PAT of INR3.1b (12%/76% YoY/QoQ decline) was affected by higher provisions of INR24.4b. Thus, credit cost stood elevated at 4.7% (annualized). NII grew 45% YoY to INR32.
Transition underway, focus on balance sheet strengthening IndusInd Bank (IIB) has reported its 4QFY20 results with the key takeaways being: (1) Profitability was impacted due to higher provisions (2) GNPA ratio increased to 2.45% (+27bps QoQ) (3) Deposits seem to have stabilized (4) Response from customers for moratorium has been low (5) Retail likely to see higher growth (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L; items, IIB delivered NII growth of 45% YoY at Rs 32,312mn, PPOP growth of 37% YoY at Rs 28,362mn and PAT decline of 16%YoY at Rs3,018mn. NII/PPOP were 7%/14% above our...
We continue to see stable asset quality, but situation remains fluid. We revised our estimates for FY20-22E and now value the stock at 0.8x FY22E BVPS, with a revised target price of Rs. 503 and continue to retain BUY as valuation looks attractive at current levels. Corona update and impact on industry Coronavirus pandemic continues to disrupt economy with number of infected people crossing +1.4mn globally (~90k deaths). India imposed a 21 day nation-wide lockdown (from 25th Mar) to contain the spread and could potentially extend it for few...
Mgmt commentary suggests a complete overhaul ahead Our key takeaway from the bank's business update conference call last evening was that a major overhaul maybe underway at IndusInd Bank. This would include tweaks' at the management level and pivoting the business strategy in a direction such that asset growth is a function of liabilities (and not the other way). One of the elements of the overall plot includes de-focusing on bulk deposits. During the quarter, the bank lost about 10-11% of deposits, of which ~75% belonged to 1-2 state governments while rest were corporate in nature. Assuming the liabilities strategy plays out on expected lines, we think historical high...
