IndusInd Bank Ltd. share price target

IIB reported a stable 4QFY21, with an in line performance. On the business front, deposits grew 7% QoQ, while loan growth is seeing a revival. On the asset quality front, GNPA ratio improved sequentially and stood at 2.67%/0.69%, with PCR ~75%. In addition to this, the bank holds a COVIDrelated provision buffer at 75bp of loans. Restructured book stood at 2% of loans (slightly higher than the guided 1.8%), largely from the Vehicle portfolio. With the rise in COVID-19 cases and a recent lockdown in a few Indian states, we remain watchful as MFI and CV are the most impacted segments. We cut our FY22E/FY23E earnings estimates by 15%/6% as we...

IIB's earnings of Rs8.7bn missed estimates (PLe: Rs9.6bn) partly on slightly weaker income and partly on continued provisions. Slippages were slightly higher led from corporate and invoked restructuring led to upgrades as well. Retail slippages though were lower sequentially has been still on higher side, continued from VF, MFI, unsecured. Restructuring outcome has been slightly than anticipated (2% v/s 1.8% expected) as second wave has increased retail/SME borrowers to opt for restructuring. With much better PCR of 74% v/s 43% in FY19 and 80bps (Rs16.0bn) of contingent provisions cushion...

Indusind Bank has reported better than expected numbers in 4QFY21, as its GNPA/NNPA ratio declined to 2.67%/0.69% from pro-forma NPA ratio of 2.93%/0.7% in the previous quarter. As a result of resumption in asset classification, the gross slippages inched up to 63.3bn v/s...

Stress created due to the Coronavirus pandemic seems to have eased for the banking sector.

IIB's promoter has taken a leap ahead to convert its due warrants of Rs20.2bn at premium of 62% from CMP, although warrants issued in Q1FY20 were also at 18% premium. Infusion of money will increase promoter stake to 15%, add 3% to BV, improve capital by 4-5% with CET-I moving to ~16% from 14.3% in Q3FY21. Promoter has pledged its holding in IIB of 5.64% (Rs40bn on Mcap) looking for acquisition/strategic investment to convert promoter holding entity (IIHL) into listed operating entity outside India by Sep'21 and provide exit to its shareholders. Promoters also intends to increase its stake to 26%...

Gross NPA ratio in the corporate book was flat at 2.52%, while in the retail loan book GNPA eased to 1.20% at end December 2020 from 3.43% and 1.38% a quarter ago. Restructured advances book of the bank increased on sequential basis at 0.60% of the advances during the quarter under review from 0.05% a quarter ago....

Loan book remained flat at Rs. 207,128cr, driven by mixed performance of Consumer finance (+5.8% YoY) and Corporate banking (-7.1% YoY). Whereas, Deposits rose 10.3% YoY. Net interest margin (NIM) declined marginally vs. previous year, to 4.12%, even as cost of deposits reduced 115bps YoY to 5.34%. GNPA/NNPA improved to 1.74%/0.22% (vs. 2.21%/0.52% in Q2FY21). Improvement in collection efficiency and capital adequacy ratios give a positive outlook. However, loan book growth remained muted despite...

Getting Back to Normalcy: Indusind Bank (IIB) reported stable set of numbers. NII growth at 11 percent was below normal run rate due to lower advances growth despite stable NIM. NIM at 4.12 was maintained despite interest reversals of Rs. 1.89 Bn due to funding cost benefits.

In Q3FY21, NII increased 10.8% YoY, 3.9% QoQ to | 3406 crore. Margins for the quarter declined a tad by 4 bps QoQ. Other income increased QoQ by 9.8% to | 1705 crore. This was mainly on account of 31% QoQ rise in core fee income. Operating expenses were under control. As a result, the costto-income ratio was down ~171 bps YoY to 41.8% but was up sequentially by ~41 bps, attributable to a rise in business activity. Provisions remained elevated at | 1854 crore but was down 5.6% QoQ. During the quarter, the bank made provisions worth | 1106 crore for Covid related stress. Overall, led by a sequential decline in provisions and pick-up in topline, the bank...

In Q3FY21, NII increased 10.8% YoY, 3.9% QoQ to | 3406 crore. Margins for the quarter declined a tad by 4 bps QoQ. Other income increased QoQ by 9.8% to | 1705 crore. This was mainly on account of 31% QoQ rise in core fee income. Operating expenses were under control. As a result, the costto-income ratio was down ~171 bps YoY to 41.8% but was up sequentially by ~41 bps, attributable to a rise in business activity. Provisions remained elevated at | 1854 crore but was down 5.6% QoQ. During the quarter, the bank made provisions worth | 1106 crore for Covid related stress. Overall, led by a sequential decline in provisions and pick-up in topline, the bank...