Hold Indusind Bank; target of Rs 1000: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect's research report on Indusind Bank
PAT growth sustained at 30% YoY to Rs 581 crore (in-line with our estimates), led by better-than expected NII & other income growth. Strong business growth continued with credit increasing 28.7% YoY to Rs 82167 crore as expected. Deposit grew higher than expected at 24.6% YoY to Rs 86423 crore. Healthy traction in CV financing continued with 31% YoY growth to Rs 13204 crore. Post several quarters it is observed that consumer finance (CF) segment’s growth at 27% YoY to Rs 34249 crore has been closer to corporate segment growth of 30% YoY to Rs 47918 crore. This enabled NII to surge 36.7% YoY to Rs 1173 crore. Asset quality saw pressure but was manageable with GNPA ratio increasing by 5 bps to 0.82% QoQ. Slippages incrementally were higher from both CF & corporate segment. GNPA increased Rs 80 crore QoQ to Rs 681 crore. The restructured book reduced from 0.63% of advances to 0.58% as in Q3FY16. Sale to ARCs were Rs 53 crore.

IIB continued to deliver a strong performance leading to continuous rerating in multiple. Normalised return ratios of ~18% RoE, 2% RoA provide comfort. PAT CAGR is seen at 28% to Rs 2937 crore by FY17E. Capital raising (~Rs 5100 crore) led to RoE decline of ~350 bps to 16%. We have tweaked our estimates as we factor in slightly higher slippages and credit costs. We value the bank at 3x FY17E ABV and revise our target price to Rs 1000 (Rs 1050 earlier). We revise rating from Buy to Hold.

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