IndusInd Bank Ltd. share price target

IndusInd Bank (IIB) commenced its operations in 1994 and had transformational management change

Our interaction with the management of IndusInd Bank (IIB) suggests that the macro uncertainties / volatility amidst current geopolitical situation and prolonged supply disruption may pose some risk to financing demand in gems/jewellery (Russia accounts for ~30% of global diamond output) and vehicle financing (due to rise in fuel prices).

IndusInd Bank (IIB) is India's fourth largest private bank.

Interest income grew 6.8% YoY to Rs. 7,737cr in Q3FY22, while interest costs rose 2.8% YoY to Rs. 3,944cr, resulting in NII growth of 11.4% YoY. Although total expenses increased 7.3% YoY, this was offset by lower provisions (-10.8%YoY) and higher non-interest income (+10.0% YoY). As the result, PAT surged 36.2% YoY to Rs. 1,161cr. Given the bank's growth potential and strong business infrastructure supported by a strong balance sheet and improved asset quality, we remain positive on the stock and reiterate our BUY rating with a rolled...

reduced by 8% sequentially. In retail banking, 2-wheeler segment and CV segment have higher GNPA ratio of 9.3% and 3.6% respectively; However NPA ratio inched down in both segment. BBG/LAP segment has GNPA of 2.9%. Stress in MFI has GNPA ratio of 3.2%. The SMA1/SMA2 stood at 25bps and 59bps respectively. The standard restructured assets went down and stood ~76bn (3.3% of book) v/s 80bn (3.6%). Vehicle finance and MFI contributed around 50% (37bn) and 13% (10bn) of restructured pool. The bank's provision expenses down sequentially to 16.5bn v/s 17bn in the previous quarter. The total provisions (including contingent) stood at...

Stable quarter; guidance maintained

IIB reported an in line operating performance, with total revenue growing 12% YoY. Asset quality ratios improved sequentially, even as stress in the MFI portfolio remained elevated. Loan book grew 3.5% QoQ, led by 6.5% growth in the Corporate book. The CV book also reported a sequential growth, led by Utility Vehicles. Its Tractor and Credit Card portfolio also witnessed healthy sequential growth. Fresh slippages stood at INR25.98b (4.7% annualized), led by MFI. The management prudently increased coverage in the MFI business. It also...

IndusInd Bank (IIB) hosted a concall led by Mr Sumant Kathpalia, MD & CEO, to discuss the concerns around the whistleblower complaint regarding the evergreening of loans in its MFI subsidiary (Bharat Financial Inclusion Limited BFIL) and the disbursements of loans without customer consent. Here are the key takeaways: The management has strongly refuted the allegations around the evergreening of loans, citing it as inaccurate and baseless. It has further clarified the inadvertent disbursements to ~84k accounts happened without customer consent due to a technical glitch. However, of these, only 26k clients were...