Buy IndusInd Bank; target of Rs 2000: ICICI Securities

ICICI Securities research report on IndusInd Bank

We believe IndusInd Bank (IIB) is well placed on growth, NIM and asset quality troika. The bank has delivered the highest CAGR in retail deposits, which should sustain, fuelling superior ~18% CAGR in loans. NIM is likely to remain stable, resulting in sector leading ~16/17% CAGR in NII / PPOP for FY24-26E. The bank has ~5-15bps improvement scope in each of NIM, opex to assets and credit costs over FY24-26E. Yet, we are conservatively factoring cumulatively <10bps RoA expansion to ~1.9% (FY25-26E) as we believe the bank would be re-investing in franchise and/or enhance cushion on credit costs and/or elongate growth trajectory.

Outlook

We acknowledge the current tight funding environment and thus our target multiple does not embed material growth component. Retain BUY with an unchanged TP of INR 2,000.