Accumulate IndusInd Bank; target of Rs 2033: KRChoksey

KRChoksey's research report on IndusInd Bank

Advances grew by 28.2% during the quarter, led by 29.8% growth in corporate vs. 25.7% growth in the retail book. NII at INR 20 bn grew 20% yoy/6% qoq, despite slight contraction in NIMs (4.05%, -3 bps qoq). Non-interest income growth was flat due to large base effect. The bank reported INR 14.5 bn opex, +11% yoy/2% qoq, translating into C/I of 45%, -100 bps qoq.

Outlook

Overall improvement in the credit book profile should translate into lower credit costs. We expect bank to deliver ROE of 17.5%/18.8% in FY19/20E. We value the bank at 4.5x FY19E ABV of INR 452 per share, translating into a target price of INR 2,033 per share. We recommend ACCUMULATE. For all recommendations report, click here

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