Hold IndusInd Bank; target of Rs 976: Arihant capital

Arihant capital markets' report on IndusInd Bank

Indusind Bank (IIB) posted healthy growth both on the top-line and bottomline front. Net profit grew by 25% YoY and stood at Rs 525 crs. Loan book grew at healthy pace of 23% YoY. The ratio of corporate to retail loans stood at 58:42. However going forward we believe with a pick-up in GDP, this ratio to tilt in favor of retail loans as demand for CV financing increases.

Asset quality for the bank looks improved with GNPAs at 0.79% levels and NNPAs at 0.30% for the quarter. PCR was at 61% against 63% in previous quarter. That said; provision sufficiency, diversified loan-mix and lower exposure to sensitive sectors will ensure stable asset quality for the bank.

"Bank allotted 5,12,18,640 shares of Rs.10/- each at price of Rs.845/- per share aggregating Rs. 4327.98 cr on July,3 2015 through QIP. Strong loantraction, resilient asset book and superior liability franchise makes us positive on the bank. We recommend Hold rating with a price target of Rs 976 based on 4.30x FY16E ABV of Rs 227", says Arihant capital markets research report.

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