Buy IndusInd Bank; target of Rs 1620: Prabhudas Lilladher

Prabhudas Lilladher is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1620 in its research report dated October 19, 2023.

Broker Research

October 19, 2023 / 21:50 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on IndusInd Bank

IIB saw a steady quarter; NII was 3.6% ahead of PLe that was offset by lower fees and higher opex (+7.1% QoQ). Superior NIM (21bps beat) was a function of (1) growth in higher yielding segments and (2) better LDR. Share of RTD continues to enhance and touched ~44%. Growth of 18-20% for FY24 can be achieved, but sustaining the same over medium term would depend on strong liability accretion. Hence we are factoring a ~17% loan CAGR over FY24-26E. Asset quality was stable; bank would like to increase buffer provisions by Rs3bn in near term which would take the reserve to ~58bps. Stock is valued at 1.7x for 1.9% RoA (FY25/26E) and levers for further re-rating are (1) strong liability accretion (2) reduction in cost to income and (3) creation of buffer provisions with decline in credit costs.

Outlook

We maintain multiple at 1.8x but as we roll forward to Sep’25, out TP increases to Rs1620 from Rs1530. Retain BUY.

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