IndusInd Bank shares gain 7% after profit jumps 60% in Q1

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Here is what brokerages have to say about stock and the company after its June quarter earnings:

Credit Suisse

Foreign broking house Credit Suisse has kept 'outperform' call on the stock with a target price Rs 1,150 per share.

The Q1FY23 steadily moving towards RoE normalisation as company reported strong operating performance in Q1, due to healthy growth and stable margin.

The RoA and RoEs have steadily improved to 1.6 percent and 13 percent as credit costs moderate, while gross slippages were elevated.

The 40 percent of gross slippages were from restructured book, down 50 bps QoQ to 2.1 percent of loans, reported CNBC-TV18.

Morgan Stanley

Brokerage house Morgan Stanley has maintained 'overweight' rating on the stock with a target price Rs 1,300 per share as Q1FY23 PAT was 23 percent above estimates.

The key positive was strong core PPoP and steady margin despite higher rates, while key negative was higher than expected slippages from restructured loans.

Morgan Stanley sees slippages/credit cost moderating, which should drive 14-15 percent RoE in FY23-24, reported CNBC-TV18.

Jefferies

Jefferies has kept 'buy' rating on the stock with a target price Rs 1,250 per share as profit rose 64 percent YoY with stronger fees and lower credit cost.

The loan growth has improved to 18 percent YoY and NIMs have also risen. The bank needs to improve on share of retail deposits from 41 percent.

The slippages were expectedly higher due to slips from restructured loans, while it should moderate hereon.

The turnaround is in play and improving RoA/ growth to aid rerating, reported CNBC-TV18.

Sharekhan

A well-capitalised balance sheet, improvement in collection efficiencies in the MFI business, reduction in fresh slippages from standard book, high PCR levels, and lower credit cost would augur well for the bank’s return ratio profile.

Given improved demand in its vehicle portfolio, MFI business, and corporate book, the bank is on an upward trajectory path in terms of achieving sustainable higher growth going forward along with building granular low-cost retail deposit franchise.

We have lowered our target multiples, factoring in higher cost of equity. We maintain our Buy rating on the stock with a revised price target of Rs 1,050.

At 11:34 hrs IndusInd Bank was quoting at Rs 940.00, up Rs 61.10, or 6.95 percent on the BSE.

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