Buy Indusind Bank; target of Rs 1195 LKP Research

LKP Research's research report on Indusind Bank

Indusind Bank has reported a good set of numbers and the positives are 1) Reported slippages (Rs21bn v/s Rs26bn in the previous quarter) inched down from the previous quarter, 2) Built ample provision buffer (PCR: 72% & Non-specific: 1.8% of book), 3) Healthy growth trajectory; 12.4% YoY and 4.6% QoQ. 4) Ample capital cushion (CAR: 18.4%) post fund raise and share warrant exercise, 5) Improvement in NIMs (4.2%) with fall in cost of fund by 18bps to 4.08%, 6) Provision expenses down significantly to Rs14.6bn v/s 16.5bn in the previous quarter, and 7) better retail deposit mobilization. Nevertheless, the negatives are 1) Slight spike in RWA of 73% v/s 72% in previous quarter, and 2) Retail book (especially 2W & CV) witnessing higher NPA formation.

Outlook

We believe, the bank has made adequate provisioning against potential stress and expect credit cost normalization to begin. Thus, we have a positive outlook on the bank with BUY rating.

For all recommendations report, click here