Buy IndusInd Bank; target of Rs 1750: ICICI Securities

ICICI Securities research report on IndusInd Bank

Driven by strong growth and stable NIM, IndusInd Bank (IIB) reported steady Q2FY24 PAT at INR 21.8bn with RoA at 1.9%. Despite a better top-line (1.5% beat) and in-line provisions, PAT was ~5% lower than our estimates due to higher opex. Retail slippages continued their improving trajectory, though rise in corporate slippages led by an isolated exposure (INR 1.68bn) disappointed. IIB, however, while keeping its credit costs guidance intact, has reassured of a moderation in overall slippages going ahead and a beefing-up of contingent provisions. We estimate the bank to deliver 18–19% CAGR in loan growth with broadly steady NIM. We see RoAs rising from 1.7% in FY23 to ~1.9% for FY24–25E with RoE rising to ~16%.

Outlook

We raise our TP to INR 1,750 (prior: INR 1,700) based on ~1.9x FY25E ABV. Maintain BUY.