Buy IndusInd Bank; target of Rs 470: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research report on IndusInd Bank

"IndusInd Bank, one of the best performing mid-sized banks announced its third quarter results on 10th Jan 2014. Net Profit rose by 30 percent YOY at Rs. 3469 mn against Rs. 2672.70 mn in Q3 FY13. Net Interest Income, difference between interest earned and expended also rose in double digits

at 26 percent and stood at Rs. 7300.90 mn against Rs. 5778 mn in the same quarter of the previous year. Even though Net Profit and Net Interest Income jumped by double digits, rise in gross and net non-performing assets upset street expectations. Gross Non Performing and Net Non Performing assets stood at 1.18 percent and 0.31 percent respectively in Q3 FY14. Both Gross and Net Non Performing assets have slipped by 19 and 1 basis points respectively. On absolute terms the rise has been 48 percent and 32 percent respectively. Though asset quality is under stress, IndusInd Bank has maintained its profitability which is commendable in the present slowing volatile economic scenario."

"On the positive side, Treasury and Retail banking segments have grown by 29 percent and 22 percent respectively in the December quarter. Net Interest Margin (NIM), rose by 19 basis points and stood at 3.65 percent in Q3 FY14. Loan book of IndusInd Bank has grown by 24 percent YOY with corporate and consumer segments rising by 34 percent and 14 percent respectively YOY. Core fee has risen by 30 percent at Rs. 4270 mn YOY. Ratio of CASA to total deposits rose to 32.20 percent (Rs. 180920 mn) in Q3 FY14 from 28.67 percent (Rs. 146510 mn) in December quarter of the previous year. Bank is also adequately capitalized with CAR of 14.38 percent (Tier I -13.28 percent) as on 31st December 2013 as per Basel III norms. With strong fundamentals, IndusInd Bank is expected to outperform its peers in the long run. Thus we recommend BUY for the scrip at a target price of Rs 470 for medium and long term," says Firstcall Research Report.

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