ICICIdirect.com's report on IndusInd Bank
PAT grew 24.7% YoY to Rs 525 crore, in line with our estimate
Traction in NII and other income was healthy and above estimates at 22.5% YoY to Rs 981 crore and 26% YoY to Rs 724 crore, respectively. However, this was offset by higher-than-expected operating expenses & provisioning expenses
Loans grew at 23% YoY to Rs 72243 crore again led by the corporate book, which was up 27% YoY. However, this time, retail book traction was also healthy at 18% YoY led by vehicle financing book
Margins at 3.68% were steady QoQ. The GNPA ratio was flat QoQ at 0.79%. However, the RA book (0.63% of loans) increased by Rs 88 crore QoQ on account of a single account getting restructured
"IIB continued to deliver a strong performance that is clearly reflected in its continuous re-rating in multiple. Normalised return ratios of ~18% RoE and 2% RoA provide comfort. PAT CAGR of 29% to Rs 3000 crore by FY17E is expected. We factor in recent capital raising (~Rs 5100 crore), which is book value accretive by ~22% while the RoE is expected to decline ~350 bps to 16% for FY17E. Thus, we adjust our target multiple lower to 3.1x from of 3.6x FY17E ABV earlier. We maintain our BUY rating on the stock with a higher target price of Rs 1050 (Rs 1000 earlier)", says ICICIdirect.com research report.
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