Hold IndusInd Bank; target of Rs 500: ICICI Direct

ICICI Direct's research report on IndusInd Bank

Slippages run rate continued to remain elevated at Rs 2058 crore in Q4FY20 vs. Rs 1945 crore in Q3FY20. Of this, Rs 1184 crore, was pertaining to three major accounts – a power/paper group, a tea group, a medical equipment group and a broking company. Write-off was at Rs 843 crore, including Rs 470 crore related to a large NBFC classified as NPA. Asset quality witnessed deterioration with GNPA ratio increasing ~27 bps QoQ to 2.45%.

Outlook

Hence, we value the stock at 0.9x FY22E ABV to arrive at a target price of Rs 500. We maintain our HOLD rating on the stock.