Buy IndusInd Bank; target of Rs 345: Firstcall Research

Firstcall Research is bullish on IndusInd Bank and has recommended buy rating on the stock with a target of Rs 345 in its September 14, 2012 research report.

“IndusInd Bank derives its name and inspiration from the Indus Valley civilization. IndusInd Bank, which commenced its operations in 1994, caters to the needs of both consumer and corporate customers. It has a robust technology platform supporting multi-channel delivery capabilities. IndusInd Bank has 421 branches, and 735 ATMs spread across 288 geographic locations of the country as on June 30, 2012. The Bank also has 2 Representative offices, one each in London and Dubai. The Bank believes in driving its business through technology. It has multi-lateral tie-ups with other banks providing ATM access to its customers across the country. It enjoys clearing bank status for both major stock exchanges - BSE and NSE - and three major commodity exchanges in the country - MCX, NCDEX, and NMCE. IndusInd Bank also offers DP facilities for stock and commodity segments. The Bank has been bestowed with the mandate of being a Settlement Banker for six tea auction centers.”

“The company’s net profit jumps to Rs. 2362.60 million as against Rs. 1801.80 million in the corresponding quarter ending of previous year, an increase of 31.12%. Revenue for the quarter rose 40.14% to Rs. 16320.40 million from Rs. 11645.80 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 5.04 a share during the quarter, registering 30.35% an increase over previous year period. Net Interest Income is Rs. 8028.80 millions as against Rs. 6054.10 millions in the corresponding period of the previous year.  IndusInd Bank launches foreign currency pre-paid travel card – the Indus Forex card that is designed to offer travelers all the convenience and a secure way of carrying foreign currency abroad. The Indus Forex card comes with an array of exciting features which have been tailor-made to ensure utmost comfort and convenience to the customers. It is available in 6 leading currencies - US Dollar, Euro, Sterling Pound, Singapore Dollar, Australian Dollar and Saudi Riyal. These cards can be used to withdraw cash from ATMs as well as to pay at Merchant Outlets. Customers can track spends or check the balance of Indus Forex card through multiple convenient options. IndusInd Bank has partnered with ElectraCard Services (ECS), a leading provider of software solutions for electronic payment systems to launch the Forex card program.”

“According to the RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks', September 2011, Nationalized Banks, as a group, accounted for 52.2 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 21.8 per cent. At the current market price of Rs.310.00, the stock P/E ratio is at 14.58 x FY13E and 12.19 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 21.26 and Rs.25.44 respectively. Net Income and PAT of the company are expected to grow at a CAGR of 34% and 27% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 10.63 x for FY13E and 10.05 x for FY14E. Price to Book Value of the stock is expected to be at 2.63 x and 2.17 x for FY13E and FY14E respectively."

"We expect that the company will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs. 345 for medium to long term investment,” says Firstcall Research report.

FIIs holding more than 30% in Indian cos

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