Divyanshi Dayanand, SBICAP Securities, says they maintain a buy on IndusInd Bank with a target of Rs 550. They are confident that the bank will be able to reduce their non performing assets (NPAs) going forward.
She added they are happy with the bank's Q2 performance on the profit front, which was on the expected lines. Below is the verbatim transcript of her interview on CNBC-TV18 Q: What is your first reaction on IndusInd Bank? Is there anything that stands out of the ordinary for you in these numbers? A: We are happy to see the results. We were anyways estimating a higher net profit of around Rs 323 crore and they have reported Rs 330 crore, so that way it is positive. The only marginal negative obviously has been the Non-Performing Asset (NPA) picture which has increased by around 10 percent, but we believe that given the environment this was more or less given. Q: Could you take us through what was your expectation in terms of their margins? A: We were estimating around 10 bps decline from the previous quarter which was around 3.72 percent in the last quarter that they reported. Given that they would have obviously increased their dependency on the high cost deposits, we were estimating that cost of funds would have increased for them. Q: So how much margin you were penciling in? A: Around 3.65 percent for this current quarter. Q: What is your take on the stock? What is your recommendation at this point and with this price? A: We are currently positive on the stock. We believe that they can weather out all these storms that are coming in from the gross NPA front. So we maintain our buy recommendation. We have a price target of Rs 550 which is around 3.15 times FY15 book value.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
