Prabhudas Lilladher's research report on IndusInd Bank
IIB’s earnings of Rs9.75bn (PLe: Rs9.97bn) was largely in-line with NII growth of 8% YoY in line with loan growth, better fees & and a relatively elevated but flat provisions. Slippages of Rs27.6bn (4.5% of loans) were high with bulk from retail but also saw decent recovery/upgrades given the collection efficiency improving in Jun/Jul’21. Prospects of recovery/upgrades remain good but should not see before end of FY22 and slippages should be lower from H2FY22 onwards. Highlight since the lockdown has been a strong comeback on deposits led from retail taking CASA to 42% from 40%and growing by average 20% which has helped on funding cost with further room ahead. Strong PCR of +70% and 100bps of COVID related provision cushions balance sheet impact and bank has managed the pandemic quite well.
We retain BUY with revised TP of Rs1,280 (from 1,195) based on 1.7x Sep-23 ABV (rolled from Mar-23).
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