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IndusInd Bank share price rises 6% after Q2 profit jumps 72%

Net interest income, the difference between interest earned and interest expended, grew by 11.6 percent to Rs 3,658.40 crore from the year-ago quarter.

October 28, 2021 / 10:19 AM IST
 
 
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IndusInd Bank share price added 6 percent intraday on October 28 a day after the company posted robust numbers for the quarter ended September 2021.

Private sector lender IndusInd Bank on October 27 reported a 72.1 percent year-on-year (YoY) growth in standalone profit at Rs 1,114 crore in the quarter ended September 2021, with a drop in bad loans provisions and non-performing assets (NPAs). Higher other income and operating profit also supported profitability.

Standalone profit in the corresponding period of the last fiscal was at Rs 647.04 crore.

Net interest income, the difference between interest earned and interest expended, grew by 11.6 percent to Rs 3,658.40 crore from the year-ago quarter.

"Net interest margin fell by 9 bps YoY to 4.07 percent in Q2 mainly due to surplus liquidity placed under repo with RBI," said the bank.

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Here is what brokerages have to say about the stock and the company post September quarter earnings:

Arihant Capital

The company has reported decent performance during Q2FY22 with momentum on growth is picking up, liability profile shaping up well and margin was stable.

We have a positive view on the stock on the back of strong improvement in its liability profile, re-accelerating credit growth, strong capital ratio (CAR at 17.4%), improving return profile and reasonable valuations (1.5x FY24E P/ABV).

Bank is expected to deliver 1.5%/13% RoA/RoE by FY24E. We roll forward our estimates to FY24E and maintain our ‘Accumulate’ rating on the stock with a revised target price of Rs 1,322 (earlier Rs 1,095), based on 1.7x FY24E ABV.

Motilal Oswal

IndusInd Bank reported an in line operating performance, with loan growth witnessing traction, while its liability franchise continues to improve, driving a consistent reduction in funding cost.

Asset quality remains stable, with higher slippages offset by a strong recovery and upgrades.

We expect bank to deliver a FY23E RoA/RoE of 1.8%/15.1%. We roll forward our estimates to Sep’23E and maintain our Buy rating with a target price of Rs 1,400 per share (1.9x 1HFY24E ABV).

LKP Research

Core operating performance of IndusInd Bank remains healthy. A higher PCR is likely to safeguard the bank from credit disruption from restructuring schemes.

Thus we retain our rating to buy with revised price target of Rs 1,372 (based on 2x FY23E Adj. BVPS of Rs 686).

Morgan Stanley

Research house remained overweight on the stock with a target price at Rs 1,500.

Its core PPoP was up 22% YoY, helped by loan growth pick-up. The bad loan formation, though, picked up QoQ, largely owing to MFI.

The balancesheet has improved, and expect earnings should pick up.

Jefferies

Broking house has maintained buy call with a target at Rs 1,400 after profit beat the estimates with lower credit cost.

The slippages & restructuring were higher from MFI/CV loans, but see this dropping from Q3. The pick-up in loan growth aided by stability in deposit/ liquidity. However, valuations are attractive t current levels.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



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first published: Oct 28, 2021 10:19 am
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