In its research report dated July 21, 2022, Prabhudas Lilladher recommended a buy rating on IndusInd Bank with a target price of Rs 1300.
Prabhudas Lilladher’s research report on IndusInd Bank
IIB had a good quarter, with core earnings of Rs15.2 billion exceeding expectations by 2.5 percent, thanks to higher fee income and lower provisions. NII/NIM improved due to a positive impact from yield, while fees gained traction as the share of retail fees increased. Due to lower recoveries, GNPA experienced a minor blip. Credit momentum is expected to continue, with IIB targeting 15-18% loan growth while keeping credit costs between 1.2-1.5 percent. The goal is to increase retail deposits, which would necessitate branch expansion, which could keep opex high. We forecast a loan CAGR of 16% over FY22-24E, with declining provision costs, while deposit accretion remains the most important monitorable.
We anticipate a healthy 33 percent CAGR in earnings over FY22-24E, with RoE increasing from 10% to 15%. At 1.2x FY24ABV, the valuation is undemanding. Maintain a multiple of 1.8x with a target price of Rs1,300. Keep BUY.
At 13:05 hrs, IndusInd Bank was trading at Rs 946.60, a 7.70 percent increase.
It reached an intraday high of Rs 961.20 and a low of Rs 893.90.
It was trading with 512,848 shares, a 369.51 percent increase over its thirty-day average of 109,230 shares.
The previous trading session saw the stock rise 1.20 percent, or Rs 10.40, to Rs 878.90.
The share hit a 52-week high of Rs 1,241.85 and a 52-week low of Rs 763.75 on October 28, 2021 and June 23, 2022, respectively.
It is currently trading 23.78% below its 52-week high and 23.94% above its 52-week low.
The market capitalisation is Rs 73,371.22 crore.
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