Buy IndusInd Bank; target of Rs 1720: Axis Direct

Axis Direct is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1720 in its research report dated July 19, 2017.

July 20, 2017 / 15:33 IST

No. 4 | Bank: IndusInd Bank 7.25 percent| Annual rate of interest: | What Rs 1 lakh grows to in three year: Rs 1,24,055

26 Aug, 2025 12:21

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Axis Direct's report on IndusInd Bank

IndusInd Bank’s (IIB) Q1FY18 PAT at ~Rs 8.4 bn (up 26% YoY) was broadly in line with our estimate. The bank chose not to write back the provisions (one-off provision of ~Rs 1.2 bn against Jaypee loan account in Q4FY17) after the cement assets deal fructified in Q1FY18. Instead, it opted to strengthen its balance sheet by creating floating provisions (~Rs 700 mn) and provide for MFI book/ SRs outstanding (~Rs 200 mn). Consequently, PCR improved 164 bps QoQ to 60%.

Outlook

Operationally, loan growth was a little below expectations, as MHCV loan (+17% YoY) slowed down. Overall loan book grew 24% YoY, with retail (+22% YoY) clocking growth slower than corporate loans (+26% YoY). NIM was flat at 4% QoQ. CASA improved ~100 bps QoQ to 37.8%. We maintain BUY with revised TP of Rs 1,720 (Rs 1,630 earlier).

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