Prabhudas Lilladher is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1640 in its research report dated December 15, 2019.
Prabhudas Lilladher's research report on IndusInd Bank
Indusind Bank organized a two-day event to showcase its progress in the Bhafin acquisition and also present on the non-corporate parts of the business for the way ahead. (i) On the micro-finance piece, we were struck by strong technology adoption by BHAFIN team especially geo tagging all the sangam managers & meeting centers real time (similar like food delivery apps & restaurants) to assess location, timings of center meeting and improve route efficiencies & KMs travelled of managers. We were also showcased about the data analytics used from BMS Kirana stores collections - these initiatives will lead to next phase of scale up for MFI business. (ii) On the consumer loans piece, bank is targeting to double assets & customer base in next three years, granulize liabilities as main priority, increase client acquisition and continue to grow at CAGR of 25%. From the interactions we conclude CVs to bottom in FY20 end while other parts of vehicle are doing well, strong build-up in consumer lending to take place which could lower mix of corporate banking, liabilities franchise will see gradual scale up and Bhafin acquisition benefit on other parts of business especially liabilities will take some time.
We retain BUY with TP of Rs1,640 based on 2.5x Sep ABV.
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