ICICI Direct recommended hold rating on IndusInd Bank with a target price of Rs 580 in its research report dated July 29, 2020.
ICICI Direct's research report on IndusInd Bank
Slippages for the quarter came in at Rs 1537 crore, from Rs 2058 crore in Q4FY20. Of the slippages, Rs 1090 crore was pertaining to a coffee group and a healthcare provider. Write-off was at Rs 1250 crore, which included Rs 1220 crore related to large infrastructure NBFC classified as NPA in Q4FY19. Led by a lower loan base, GNPA ratio inched up 8 bps QoQ to 2.53% with absolute GNPA at Rs 5099 crore. On account of standstill asset classification norms, NNPA ratio was down 5 bps to 0.86%.
We estimate FY22E RoA, RoE at 1.1% and 9.4%, respectively. On account of limited upside, we value the stock at 1.1x FY22E ABV to arrive at target of Rs 580 per share. We maintain our HOLD rating on the stock.
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