Buy IndusInd Bank; target of Rs 2000: Prabhudas Lilladher

Prabhudas Lilladher is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 2000 in its research report dated October 15, 2018.

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October 18, 2018 / 14:28 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on IndusInd Bank

IIB's earnings of Rs9.2bn (PLe: Rs10.8bn) were below expectations which grew 5% YoY as bank created contingency provisions of Rs2.75bn on infra account (IL&FS). Core operating performance was largely in-line as bank showcased strong control on opex and steady other income, while NII was slightly weaker than expected as pressure continued on funding cost. Asset quality was largely steady, but Bank has kept the exposure to infra sector as standard in books which could pose risk on asset quality in our view, although it believes exposure is backed by good asset cash flows. We expect that NIMs will start improving from Q3FY19 end onwards led by MCLR repricing coupled with robust loan growth, while other operating metrics like CASA, C/I and asset quality to be steady (we closely watch IL&FS exposure) helping ROEs.

Outlook

We retain BUY with revised TP of Rs2,000 (from Rs2,075) based on 3.5x Sep-20 P/ABV (from 3.8x Mar-20 ABV) on rollover and increase COE assumptions.

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