Buy Indusind Bank; target of Rs 1700: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's report on Indusind Bank

IndusInd Bank’s (IIB) 4QFY17 PAT grew 21% YoY (in-line) to INR 7.5b. Provisions were elevated at INR 4.3b as they included one-off amount of INR 1.22b on a bridge loan for a cement M&A transaction (account remains standard), where the receivable is in June (likely to get reversed in 1QFY18).

Outlook

Strong core profitability (3% of avg. assets v/s private banks’ avg. of 2.5% and HDFCB’s 2.7%), an improving CASA ratio (best among mid-sized private banks) and healthy return ratios (RoA of 1.9%+ and RoE of 16-18%) are the key positives. We upgrade estimates by 4-5% to account for higher growth. Maintain Buy with a target price of INR 1,700 (3.8x FY19 BV).

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