Motilal Oswal is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1900 in its research report dated May 22, 2019.
Motilal Oswal's research report on IndusInd Bank
IIB reported PAT of INR3.6b (our estimate: INR5.3b) in 4QFY19, affected by higher provisions of INR15.6b (INR11.2b toward IL&FS). NII growth moderated to 11% YoY led by interest reversal of INR1.5b, while the NIM shrank to 3.59% (3.84% without interest reversals). For FY19, NII/PPoP grew 18%/22%, while PAT declined 8.5% YoY to INR33b. Total income increased 18% YoY, led by healthy other income growth of 29% YoY. Core fees rose 28% YoY, led by forex income and loan processing fees. Opex growth (+19% YoY) was slightly higher, leading to PPoP growth of 17% YoY. IIB guided for a C/I ratio improvement of 150bp to 42% over FY20.
We conservatively factor in higher credit cost of 100/80bp over FY20/21, resulting in an 8%/3% cut in our FY20/21 earnings estimates. We, nevertheless, estimate IIB to deliver FY20/21 RoA of 2.0%/2.1% and value the stock at INR1,900 (3x FY21E ABV).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.