Accumulate IndusInd Bank; target of Rs 1050: P Lilladher

Prabhudas Lilladher's report on IndusInd Bank (IIB)

IIB reported a steady quarter with Q1FY16 PAT growing by 25% YoY to Rs5.25bn (PLe: Rs5.27bn). Other income continues to remain buoyant, while NII improved 18.4% YoY to Rs9.81 bn (PLe: Rs9.88 bn). IIB sold assets worth Rs230m during the quarter and now has an outstanding SR book of Rs2.14bn. We build-in capital infusion into our numbers and fine-tune our business growth and opex estimates."

"IIB reported stable trend in NPL ratios, marginally aided by Rs230m of fully provided bad loan sale to ARC. Coverage ratio, thus, declined by 202bps to 60.6%. Restructured p/f also increased to 0.63% (0.53% in Q4FY15) while o/s SR portfolio equates to 30bps of total loans. Post recent capital infusion, the bank is well capitalized and has Tier-I of ~16%, while the regulatory relief on retail loans has further helped IIB in controlling RWA growth. We maintain “Accumulate” with revised PT of Rs 1,050 (from Rs 980)", says Prabhudas Lilladher research report.

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