HDFC Securities is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 1966 in its research report dated April 19, 2018.
HDFC Securities' research report on IndusInd Bank
Divergence in asset quality coupled with subdued fees (+12% YoY, a multi-quarter low) marred an otherwise robust show for IIB. Broad based growth (+28%), controlled opex (11/2% YoY/QoQ) and robust CASA accretion (CASA Ratio +870bps YoY) were heartening. The sequential uptick in corp yields (+11bps, a pleasant surprise) balanced out the retail drop (17bps) and kept NIMs stable at 3.97%. IIBs ability of consistently beating daunting targets and precise execution capabilities drive our constructive thesis. We believe IIB (along with a few other large private banks) is well positioned to capture market share ceded by the PSBs and deliver robust growth in the near future. Additionally, the managements focus on widening product offerings by creating (or acquiring) financial service subs will create long term wealth. The impending merger with BFI will further boost return ratios.
Maintain BUY with a TP of Rs 1,966 (3.75x Mar-20 ABV of Rs 524)
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