Buy IndusInd Bank; target of Rs 1400: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on IndusInd Bank

We believe IndusInd Bank is coming out of a tough cycle and concerns about asset quality, liquidity amid COVID-19 pandemic for bank is fading away, as collection efficiencies (due to recovery in core portfolio CV/MFIs) and liquidity position (LCR ~124%) is improving over the past few quarters. Bank reported credit cost at 3.8%/3.0% during FY21-22, but accelerated provisions made in past few quarters (in turn maintaining healthy provisioning on stressed assets) and additional non-NPA provision buffer of 1.2% of loans will enable a sharp drop in credit cost and would drive strong earnings recovery. Its credit cost is expected to fall sharply to ~150 bps annually over FY23-25E. With a view to strengthen its liability franchise, bank has been improving the granularity of its deposit book. Retail deposits’ share rose from ~26% in FY2019 to ~41% in FY2022.

Outlook

At CMP, IIB trades at 1.6x and 1.4x its FY2023E/FY2024E BV. We maintain Buy with a revised TP of Rs. 1,400.

More Info

At 16:01 hrs IndusInd Bank was quoting at Rs 1,140.35, down Rs 24.05, or 2.07 percent.

It has touched an intraday high of Rs 1,162.95 and an intraday low of Rs 1,132.80.

It was trading with volumes of 122,313 shares, compared to its thirty day average of 237,969 shares, a decrease of -48.60 percent.

In the previous trading session, the share closed up 1.32 percent or Rs 15.20 at Rs 1,164.40.

The share touched its 52-week high Rs 1,275.25 and 52-week low Rs 763.75 on 20 September, 2022 and 23 June, 2022, respectively.

Currently, it is trading 10.58 percent below its 52-week high and 49.31 percent above its 52-week low.

Market capitalisation stands at Rs 88,404.89 crore.

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IndusInd Bank- 280922 - khan