Buy IndusInd Bank; target of Rs 1450: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on IndusInd Bank

IIB has demonstrated a healthy traction in operating performance over the past few quarters as it successfully braved the storm in late FY20 and FY21. It reported a loan growth of ~18% in 1QFY23 (vs average of 8% over FY20-22). Improving business activity and a recovery in its core CV and MFI segments will aid overall portfolio growth and further ease credit cost. We expect 18% loan CAGR over FY22-24. The management is strengthening its liability franchise, with an increased focus on garnering Retail deposits. The same has clocked 39% CAGR over FY20-22, while the mix, as per LCR disclosures, rose by ~1,000bp to 41%. Asset quality risks are receding, with a gradual reduction in stress from the MFI and CV book. The restructuring book too moderated to 2.1% of loans, which will keep slippages under control. The bank carries a healthy PCR of ~72% and a provision buffer of 1.2% of loans, which will result in a moderation in credit cost to 1.3% by FY24E. We have added IIB to our Model Portfolio, which was last published in Feb'22, and the stock has delivered ~26% returns since then. With key issues addressed, and steady progression in earnings along with improving growth momentum we expect the stock to re-rate further.

Outlook

We estimate FY24 RoA/RoE of 1.9%/15.7% and maintain our Buy rating with a TP of INR1,450 (1.8x FY24E ABV).

More Info

At 16:01 hrs IndusInd Bank was quoting at Rs 1,149.50, down Rs 33.70, or 2.85 percent.

It has touched an intraday high of Rs 1,180.00 and an intraday low of Rs 1,136.65.

It was trading with volumes of 115,472 shares, compared to its thirty day average of shares, a decrease of percent.

In the previous trading session, the share closed down 2.67 percent or Rs 32.40 at Rs 1,183.20.

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 9.86 percent below its 52-week high and 50.51 percent above its 52-week low.

Market capitalisation stands at Rs 89,114.24 crore.

For all recommendations report, click here

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IndusInd Bank - 260922 - moti