LKP Research is bullish on Indusind Bank has recommended buy rating on the stock with a target price of Rs 2270 in its research report dated October 16, 2018.
LKP Research's research report on Indusind Bank
PAT of the bank showed subdued growth of +5% yoy (-11% qoq). Largely numbers were in-line in terms of growth and operational efficiency; however, there was a miss on the credit cost & margins. During the quarter, the bank made Rs 2.75 bn contingent provisions for IL&FS Group exposure, however, account still remains standard in the books of the bank. The bank has proactively created this provision buffer, though future provisions would be determined by resolution plan on IL&FS which is most likely to come by month end. On the other hand, margins were also down by 8 bps led by tight liquidity conditions during the quarter and faster repricing of deposits than advances.
Outlook
On the whole, our positive constructive call on Indusind Bank remains intact. Retain BUY with TP of Rs 2,270 given strong asset growth, relative better asset quality profile, gaining market share, strong management team in place.
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