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Last Updated : Oct 01, 2020 11:54 AM IST | Source: Moneycontrol.com

IndusInd Bank shares jump 6%; brokerages keep faith in the stock

The brokerage believes that the impact of COVID-19 on retail and SME asset quality is inevitable, but its stance to build high credit reserves even at the cost of near-term earnings is the right step.

 
 
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After suffering losses for the last two consecutive sessions, shares of IndusInd Bank witnessed a strong bounce in intraday trade on BSE on October 1.

Shares of the private lender jumped 6 percent in intraday trade on BSE as brokerages kept faith in the stock.

Brokerage firm LKP Securities has a buy call on the stock with a target price of Rs 705.

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"Core operating performance of Indusind Bank remains healthy. A higher COVID provision is likely to safeguard the bank from credit disruption from COVID. Thus we recommend a buy with a price target of Rs 705 (based on 1.1 times FY22E Adjusted BVPS)," said LKP Securities.

Brokerage firm Emkay Global has a hold call on the stock with a target price of Rs 550, rolling forward on 0.9 times September 22E ABV.

The brokerage believes that the impact of COVID-19 on retail and SME asset quality is inevitable, but its stance to build high credit reserves even at the cost of near-term earnings is the right step.

"We trim FY21E earnings by 22 percent due to up-fronting of provisions factoring in high LLP and raise FY23 estimates by 5 percent. We have also factored in the recent capital infusion of Rs 3,280 crore," Emkay said.

Shares of IndusInd Bank traded 5.65 percent higher at Rs 556.50 on BSE at 11:45 hours.

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First Published on Oct 1, 2020 11:54 am
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