Accumulate IndusInd Bank; target of Rs 940: Dolat Capital Market

Dolat Capital Market recommended accumulate rating on IndusInd Bank with a target price of Rs 940 in its research report dated January 30, 2021.

Broker Research

February 03, 2021 / 17:05 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Dolat Capital Market's research report on IndusInd Bank

IIB’s operating metrics continued to strengthen with largely stable NIM despite impact of interest reversal (down by 4 bps to 4.12%), healthy sequential growth in fee lines (31% QoQ), and contained opex. Gross NPAs increased by 67 bps QoQ to 2.97% on a pro-forma basis. Pro-forma slippages at 4.7% for the quarter and 3% for 9MFY21 were within expectations, with 30% of it from unsecured retail (PL/CC/BL), 20% each from vehicle and MFI portfolios, and 15% each from secured retail and corporate books. Pro forma PCR at 76% is amongst the highest in industry. The bank is expected to restructure ~1.8% of loans by Mar-20, ~60% of which is from corporate book and ~30% from vehicle.

Outlook

Our earnings upgrade for FY21E is mainly driven by improved operational metrics including NIM, fee lines and opex. Credit costs have not been altered materially. Valuing the bank at 1.6x Dec-22 ABV against a RoA/RoE of 1.5%/12.5%, we maintain our ACCUMULATE rating with a TP of Rs940.

For all recommendations report, click here