IndusInd bank to maintain stable asset quality over FY19-20, stock may give 14% return: Anandrathi

No. 4 | Bank: IndusInd Bank 7.25 percent| Annual rate of interest: | What Rs 1 lakh grows to in three year: Rs 1,24,055

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Anand Rathi Advisory

IndusInd Bank continues to report robust operating performance after having absorbed the high NPA divergence reported this quarter, keeping profitability intact.

Low credit costs, steady NIM and high credit growth would keep profitability high through FY19-20. The strategic BHAFIN deal would be synergistic in the medium term.

We expect the bank to maintain stable asset quality over FY19-20, aided by its well-diversified loan mix. We expect slippages from the corporate book to shrink as the bank increases its exposure to higher-rated corporate bodies. Thus, we model a gross-NPA ratio of 0.97 percent in FY20.

The healthy, 4 percent, NIM was aided by the high CASA-deposits ratio, now at a sound 44 percent (up 36.9 percent y/y). The traction in SA deposits (70 percent y/y) continues to surprise positively. We expect NIM to improve further as management intends to rebalance the corporate- and consumer-book ratio to 50:50 (from 60:40).

We factor in 26 percent overall credit growth through FY19-20. The corporate book was largely driven by gaining market share from PSBs and working-capital loans to better-rated corporate bodies.

With a pick-up in CV growth expected in FY19, retail advances could be buoyant.

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.