Buy IndusInd Bank; target of Rs 680 : Prabhudas Lilladher

Prabhudas Lilladher is bullish on IndusInd Bank has recommended buy rating on the stock with a target price of Rs 680 in its research report dated July 29, 2020.

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July 30, 2020 / 16:46 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on IndusInd Bank

IIB’s PAT of Rs4.6bn (PLe: Rs4.8bn) was marginally below estimates on higher than expected provisions mainly towards COVID related and enhancing PCR to 66%. As first time disclosures +50% of loan book was under moratorium 1.0 with retail being high at 75% which has come down to 16% in the extended moratorium upto Jun’20 and 19% in retail, while corporate book was at 9%. Bank has guided from their second stress test it is likely to see additionally 90bps higher than stress test 1.0 and 60bps credit cost incrementally. Overall collection in MFI has reached to 86% and other business slightly lower but continues to improve in July. We have slightly increased credit cost assumptions to +200bps with 300bps slippages in FY21/FY22.

Outlook

Although, good capital levels, better NIMs/PPOP to absorb some of the provisions gives us some comfort. We maintain BUY with revised TP of Rs680 (from Rs720) based on 1.1x Mar-22 ABV.