Hold IndusInd Bank; target of Rs 288: Unicon Investment

15676 Investors following IndusInd Bank. Share this News with them.

0

Like this story, share it with millions of investors on M3

Hold IndusInd Bank; target of Rs 288: Unicon Investment

Unicon Investment has recommended hold rating on IndusInd Bank with a target of Rs 288, in its January 11, 2012 research.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Punjab National Bank; target Rs 1309: Dolat Capital Buy GMR Infrastructure; target Rs 39: Nirmal Bang Buy Axis Bank; target Rs 902: Nirmal Bang ALSO READ See previous views by Unicon Investment See what other Experts & Brokerages are saying about IndusInd Bank See messages about IndusInd Bank IndusInd Bank BSE | NSE 01/06/12 Are Mutual Funds betting on IndusInd Bank?

Unicon Investment has recommended hold rating on IndusInd Bank with a target of Rs 288, in its January 11, 2012 research.

"IndusInd Bank (IIB) delivered strong growth in the quarter with Net profit growing by 34% YoY to INR 2060 mn mainly driven by robust interest income growth on advances & investments by 50% & 57% YoY respectively. However, it was below our estimates of INR 2183. IIB's net interest income has grown by 19% to INR 4307 mn as compared to INR 3630 mn in Q3FY11 & other income increased by 35% YoY to INR 2651 Mn. The core fee income grew by 46% to INR 2503 Mn YoY due to focus on new fee enhancers. The main drivers have been foreign exchange income & distribution fees which grew by 84% & 65% to INR 601 Mn & INR 663 Mn YoY respectively."

"IIB has registered more than industry loan & deposit growth of 30% & 32% to INR 324 Bn & INR 406 Bn respectively. The saving rate deregulation has helped IIB in registering a 21% growth in saving deposits on a sequential basis. It also increased its contribution in CASA to 9.8% (8.6% Q2FY12). However, the contribution of current account in CASA dropped to 16.7% (19.2% in Q2FY12) on account of sluggish capital markets. Therefore, the CASA ratio fell to 26.5% vs. 27.7% in Q2FY12. Due to increase in cost of funds reported NIMs have fallen by 36 bps & 10 bps to 3.25% on YoY & QoQ basis respectively. The cost of funds have risen by 8 bps to 7.23%, whereas yield on assets increased by only 2 bps to 13.81% on sequential basis. However, the cost of deposits have remained flat at 8.16% while the yield on advances increased by 2 bps to 10.5%."

"IIB continued to maintain its strong asset quality as the slippage ratio remained below 1%. The Net & Gross NPA was contained at 0.29% 1.02% in Q3FY12 vs. 0.36% & 1.21% in Q3FY11. The NPA coverage ratio was at 72%. The credit costs surprised positively, which stayed low at ~33 bps for 9MFY12. however, going forward due to concerns over the economy credit costs are likely to go up. IIB also maintained a healthy capital adequacy ratio (CAR) of 13.43% in Q3FY12. The strong traction in CAR is likely to sustain IIB's growth momentum in coming quarters. Branch addition continued to be strong, as the bank added ~15 branches this quarter to take the network to ~365."

"Indusind Bank is planning to increase CASA ratio ~28% by expanding its branch network thereby increasing its NIMs ~3.5% further in FY13. Expanding its product suite and services by bank is expected to deliver healthy bottomline growth in FY13. At CMP stock is trading at 2.3x of its FY13 book value and in comparison to its peerset, IIB is trading at higher valuations. We have HOLD rating on the stock for price target of INR 288," says Unicon Investment research report.

FIIs holding more than 30% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment