Buy IndusInd Bank; target of Rs 1663: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on IndusInd Bank

IndusInd Bank (IIB), yet again, delivered a top quartile performance across parameters. CASA jumped ~250bps QoQ (37.8%) led by strong SA growth (17%), balanced loan growth (24% YoY), superior NIM (4%), healthy fee traction (+25% YoY), PCR improvement (60%, +165bps QoQ). Other positives include slower RWA growth (1% QoQ vs. loan growth of ~3%) and conservative utilization of one-time provisions (Rs 1.2bn). Higher slippages (led by relapse and retail book) drove GNPAs up by ~21%. However, the gross stressed book remains stable QoQ at 1.3% (one of the best in the industry).

Over the last three planning cycles (PC), IIB has delivered superior performance in all business metrics. We believe that with every growth engine revving up (network, CRAR, diversified book and innovation), constantly improving liability franchise, favourable margin environment, improving efficiencies and impeccable asset quality, IIB is set to deliver superior return ratios (RoA of ~1.8% by FY19E). Maintain BUY with a TP of Rs 1,663 (3.75xFY19E ABV of Rs 443).

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