KR Choksey's research report on IndusInd Bank
In Q1FY24, Net Interest Income (NII) grew by 4.2% QoQ/ 18.0% YoY to INR 48,671 Mn. The Net Interest Margins (NIMs) were 4.29% for Q1FY24, an improvement of 8 bps YoY, while stable on QoQ basis. Pre-Provision Operating Profits (PPOP) grew 11.7% YoY/ 2.0% QoQ in Q1FY24 to INR 38,315 Mn. Provisions for Q1FY24 were INR 9,916 Mn, a decline of 20.7% YoY and 3.7% QoQ. The net profit for Q1FY24 stood at INR 21,245 Mn, an increase of 30.2% YoY and 4.0% QoQ, primarily led by lower provisions. As of June 30, 2023, GNPA/ NNPA were 1.94%/ 0.58%, respectively, which improved from 1.98%/ 0.59% as of March 31, 2023, respectively. Advances grew at 21.4% YoY/ 3.8% QoQ at INR 30,10,410 Mn, while deposits grew at 14.6% YoY/ 3.3% QoQ at INR 34,70,470 Mn as of June 30, 2023. The bank's total Capital Adequacy Ratio as per Basel III guidelines stood at 18.4% as of June 30, 2023. Tier 1 CRAR was at 16.44%.
Outlook
We assign a P/B multiple of 1.9x to the FY25E adj. BVPS of INR 898.4 and revise our target price to INR 1,705 per share (earlier INR 1,475), an upside of 20.0% over the CMP. Accordingly, we maintain our rating on the shares of IndusInd Bank to "BUY."
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