IndusInd Bank Ltd. share price target

Valuation and Risks: Despite concerns over near-term asset quality risks and impact of high credit costs on earnings, we believe all negatives and concerns are adequately priced incurrently as the stock is trading at historically low valuations.

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)...

We recommend a BUY on Indusind Bank with a Target Price of Rs 585, an upside of 12% from CMP of Rs 521 and Stop Loss Rs 490.

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...

IIB's PAT of Rs4.6bn (PLe: Rs4.8bn) was marginally below estimates on higher than expected provisions mainly towards COVID related and enhancing PCR to 66%. As first time disclosures +50% of loan book was under moratorium 1.0 with retail being high at 75% which has come down to 16% in the extended moratorium upto Jun'20 and 19% in retail, while corporate book was at 9%. Bank has guided from their second stress test it is likely to see additionally 90bps higher than stress test 1.0 and 60bps credit cost incrementally. Overall collection in MFI has reached to 86% and other...

As guided in Q4FY20, IndusInd's deposit growth improved sequentially (up 5% QoQ). We see this will address concerns of the street on liability management of the bank. NII grew by 16% YoY led by improvement in margins; however non-interest income declined by 9% YoY (down 14% QoQ) due to lower retail disbursements. Consolidated PAT decline by 68% YoY due to higher provisions (up 424% YoY) including floating provisions of Rs.9.2bn on Covid-19. GNPA increased slightly to 2.53% vs 2.45% QoQ; however in absolute terms GNPA declined sequentially (down 1% QoQ). Moratorium book declined from 50% (April'20) to 16% as of June'20. We largely maintain our estimates for FY21/22E. We retain our BUY rating with a new TP of Rs.650 (earlier...

IndusInd Bank's (IIB) Q1FY21 PAT of Rs 5.1bn beat our estimate of Rs 3.8bn on better NII growth, stable NIMs and higher treasury gains.

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...