Buy IndusInd Bank; target of Rs 1400: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on IndusInd Bank

IIB reported an in line operating performance, while higher other income drove an earnings beat. Provisions moderated QoQ, despite the bank making additional standard provisions of INR9.8b. Loan growth picked up sharply, led by Corporate and MFI/Credit Cards, while the Vehicle book remains muted. Retail disbursements have crossed pre-COVID levels across most segments. Deposit trends continue to remain strong, led by Retail term deposits. Fresh slippages stood at INR26.6b (annualized at 5% of loans), led by MFI (INR10.7b), Vehicle Finance (INR5.9b), and other Retail segments, while recoveries and upgrades remain strong, supporting asset quality ratios. GNPA/NNPA ratio fell 11bp/4bp to 2.77%/0.8%, while PCR stood healthy at 71.6%. Restructured book increased to 3.6% of loans (v/s 2.7% in 1QFY22). However, healthy coverage and contingent provisioning buffer at 1.4% of loans provides comfort on asset quality. We reiterate our Buy rating.

Outlook

We roll forward our estimates to Sep’23E and maintain our Buy rating with a TP of INR1,400 per share (1.9x 1HFY24E ABV).

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