Motilal Oswal's research report on IndusInd Bank
IndusInd Bank (IIB) reported a stable 2QFY21 even as the bank continued to make higher provisions. Fee income picked up sequentially while margins were impacted due to excess liquidity. Loan growth was muted while the traction in garnering deposits stood strong. PCR improved sharply to 76.7%. The bank increased COVID-19 provisioning buffer to INR21.5b. IIB reported collection efficiency of ~95% for Sep’20. The bank has guided for a restructuring book of low single digits. We increase our estimates slightly factoring in the higher NII and moderation in opex. Maintain Buy.
Outlook
However, strong profitability would still enable IIB to deliver FY22E RoA/RoE of 1.4%/12.5%. Maintain Buy with TP of INR720 (1.2x Sep’22E ABV).
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