Buy IndusInd Bank; target of Rs 615: Anand Rathi

Anand Rathi 's research report on IndusInd Bank

Higher margins and Treasury income led to a 352bp sequential decrease in C/I, which improved to 39.4%. Asset quality and PCR improved. The portfolio under moratorium sharply declined from 50% in Q4 FY20 to 14% in Q1 FY21. The run on deposits last quarter reversed, with 5% sequential growth. SMA disclosures and management commentary suggest no major risk in asset quality due to the Covid’19-driven slowdown.

Outlook

With lower risk on asset quality than envisaged earlier and the arrest on run on deposits, we change our stance on the bank and accordingly upgrade it to a Buy, with a TP of `615.