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What should investors do with IndusInd Bank post Q4 results: buy, sell or hold?

Net interest income (NII) grew by 9.4 percent to Rs 3,534.61 crore for the quarter against Rs 3,231.19 crore reported in the corresponding quarter of the previous fiscal.

May 03, 2021 / 09:31 AM IST
 
 
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IndusInd Bank share price rose in early trade on May 3 after the company announced its March quarter earnings.

On April 30, the company reported a 190.2 percent year-on-year (YoY) spike in its standalone net profit at Rs 875.95 crore for the quarter ended March 2021. Profit in the year-ago quarter stood at Rs 301.84 crore.

Net interest income (NII) grew by 9.4 percent to Rs 3,534.61 crore for the quarter against Rs 3,231.19 crore reported in the corresponding quarter of the previous fiscal.

Also Read - IndusInd Bank Q4 profit spikes 190% to Rs 876 crore as provisions decline

Here is what brokerages have to say about the stock and company after Q4 earnings:

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Nomura | Rating: Buy | Target: Rs 1,130

Management expects to grow CVs, vehicles, MFI & diamond financing, while rising COVID-19 cases may impair the growth in high-touch businesses.

Jefferies | Rating: Buy | Target: Rs 1,300

CASA is building up, while RoA is set to expand and see further leg-down in credit cost that will lift RoA from FY22.

CASA is also building up well & management sees scope to cut rates, this will be key to lift loan growth from just 3% QoQ now.

CLSA | Rating: Buy | Target: Rs 1,325

Q4 was better than expected. Improving deposit granularity, adequate coverage should ensure stability. Expect ROE to increase to about 15% by FY23/24, while current valuations look undemanding.

Sharekhan | Rating: Buy | Target: 1,340

Bank posted positive performance for Q4FY2021 in line with expectation operational performance and asset quality improving on a sequential basis.

Sharp improvement in reported GNPA/NNPA numbers, which came at 2.67%/0.69%, down from the proforma basis, GNPA/NNPA ratio of the bank at 2.93%/0.70% in Q3 FY2021.

Prabhudas Lilladher | Rating: | Target: Rs 1,195

Slippages were slightly higher led from corporate and invoked restructuring led to upgrades as well. Retail slippages though were lower sequentially has been still on higher side, continued from VF, MFI, unsecured.

We expect loan growth will continue to be slower at 8-10% in FY22 as bank continues to re-calibrate its assets but improve ahead, while deposits side it is demonstrated strong comeback.

Motilal Oswal | Rating: buy | Target: Rs 1,200

The rise in COVID-19 cases and the recent lockdown in a few states would be key to watch out for in the near term as MFI and CV are the most affected segments.

We cut our FY22E/FY23E earnings estimate by 15%/6% as we expect provisions to stay elevated and estimate credit cost of 2.5% in FY22E. We expect IIB to deliver RoA/RoE of 1.7%/14.4% in FY23E

LKP | Rating: Buy | Target: Rs 1,115

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

Dolat Capital | Rating: Accumulate | Target: Rs 1,060

Bank's operating metrics were in-line, with NII and PPoP growing by 9%/10% YoY respectively and largely stable NIM. NIM was adversely impacted by higher liquidity during Q4FY21 with 7% QoQ rise in deposits vs less than 3% growth in advances.

Trends on collection efficiency and disbursements remained healthy in Q4FY21 but were impacted in April month as per management.

ICICI Direct | Rating: Buy | Target: Rs 1,100

The management is geared to pedal growth ahead with focus on certain segments. Improvement in capitalisation levels post warrant subscription by management to aid strength for balance sheet expansion.

We expect business momentum to pick up from here on with corporate re-alignment largely achieved. Asset quality is expected to improve in FY22E, though impact of second wave needs to be assessed. The bank has conservatively provided its unsecured, MFI loans and has ample provisions on books, which should reduce earnings volatility.

At 09:22 hrs, IndusInd Bank was quoting at Rs 938.40, up Rs 3.45, or 0.37 percent on the BSE.

The share touched a 52-week high of Rs 1,119.20 and a 52-week low of Rs 330.00 on 25 February, 2021 and 22 May, 2020, respectively.

Currently, it is trading 16.15 percent below its 52-week high and 184.36 percent above its 52-week low.

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.
Moneycontrol News
first published: May 3, 2021 09:31 am

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