LKP Research's research report on Indusind Bank
Indusind Bank has reported stable set of numbers and the positives are 1) 68% YoY jump in reported profit, led by NIMs expansion (4.27%) and lower provisioning expenses (down 36% YoY), 2) Strong business growth (credit: 19.3% YoY, Deposits: 14.3% YoY), 3) Stable PCR level (PCR: 71% & Non-specific: 1.25% of book), 4) Reduction in restructuring book to 1.25% v/s 1.5% in the previous quarter, 5) Ample capital cushion (CAR: 18.01%), Nevertheless, the spike in consumer GNPA (2.6% v/s 2.36%) is the biggest disappointment. We believe, the bank has made adequate provisioning against potential stress. However, the delinquencies from vehicles segment and credit cost in next quarter will be keenly watched. Moreover, a healthy CDR (84%) gives further room for credit growth. We have a positive outlook on the Bank with a BUY rating.
Outlook
Core operating performance of the Indusind Bank remains healthy. A higher contingent buffer is likely to safeguard the bank from credit disruption from various restructure schemes. We retain our rating to BUY with price target of ₹1473 (based on 1.8x FY24E Adj. BVPS of ₹818).
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