Buy IndusInd Bank; target of Rs 1450: Prabhudas Lilladher

Prabhudas Lilladher is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1450 in its research report dated October 20, 2022.

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October 20, 2022 / 22:10 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on IndusInd Bank

IIB saw a strong quarter with core earnings beating estimates by 9% led by lower provisions due to material improvement in asset quality. GNPA fell by 24bps QoQ to 2.1% driven by considerable reduction (~50%) in net slippages while OTR pool too decreased from 2.1% to 1.5% QoQ and 70% of the fall was led by recoveries. PPoP came in as expected with NIM/NII, fees and opex being in-line. IIB is targeting a loan growth of 18-20% in FY23, keeping credit costs between 1.2-1.5%, though opex may remain elevated. Strong retail deposit formation would require rate gap with peers to be maintained. With material stress reduction, we lower provisions for FY23/24 and raise PAT by average ~5.3%.

Outlook

Over FY22-25E we expect an earnings CAGR of 31% while RoE may rise from 10% to 16%. Rolling forward to Sep’24 ABV we maintain multiple at 1.8x but raise TP from Rs1,300 to Rs1,450. Retain BUY.

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