Buy IndusInd Bank; target of Rs 1850: KR Choksey

KR Choksey's research report on IndusInd Bank

IndusInd Bank result was in-line with our estimates with minor deviations of ~2.0% headline numbers. In Q4FY24, Net Interest Income (NII) grew by 1.5% QoQ/ 15.1% YoY to INR 53,765 Mn. The NII was lower by 2.6% on the back of slightly lower yields on assets. PreProvision Operating Profits (PPOP) grew 8.6% YoY/ 1.0% QoQ in Q4FY24 to INR 40,815 Mn. The PPOP was 2.9% lower than our estimates. The net profit for Q4FY24 stood at INR 23,492 Mn, an increase of 15.0% YoY and 2.1% QoQ, primarily led by stable credit cost and healthy operating performance. The net profit was 2.0% lower than our estimates.

Outlook

We have cut our net profit estimates by 4.3%/ 4.5%, considering a slight moderation in the growth and increase in the credit costs. We assign a P/B multiple of 1.8x to the FY26E adj. BVPS of INR 1,027.7 per share and revise our target price to INR 1,850 per share. Accordingly, we maintain our rating on the shares of IndusInd Bank at "BUY."