Hold IndusInd Bank; tgt of Rs 685: Arihant capital market

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26 Aug, 2025 12:21

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Arihant capital market`s research report on IndusInd Bank“Indusind Bank (IIB) posted healthy growth both on the top‐line and bottomline front. Net profit grew by 30% YoY and stood at Rs 430 crs. Loan book grew at healthy pace of 22% YoY. The ratio of corporate to retail loans stood at 57:43, However going forward we believe with a pick‐up in GDP this ratio to tilt in favour of retail loans as demand for CV financing increases.” “The loan book recorded a steady growth of 22% while deposits grew at a faster pace by 24%. Consumer finance growth of 7% was disappointing, however corporate loan book growth of 37% made up for it. On the deposits front, the CASA stood at 33.9% compared to 33.3% QoQ. In the current quarter bank added 47 branches, for FY15 it plans to add 150 branches. NII growth of 19% is in line with expectations. Going forward with pick‐up in Consumer finance biz which is high margin business NII is expected to grow at faster pace. The robust other income growth of 34% YoY backed by strong 31% growth in core fee income drove the operating profits of the bank. The fee income growth continues to outpace loan growth. RoA’s remained stable at 1.88%, RoE at 18.24% also remains strong. The fixed‐rate nature of loan book and appropriate loan pricing, rich loan mix coupled with CASA traction aided margin expansion for the quarter. Therefore, despite softening of yields, margins at 3.63% surprised positively.” “Strong loan traction, resilient asset book and superior liability franchise makes us positive on the bank and we reckon IIB as a value pick in the private sector space. We recommend to HOLD with a price target of Rs 685 based on 3x FY16E ABV of Rs 228.5,” says Arihant capital market research report.    

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