ICICI Securities research report on IndusInd Bank
Despite higher opex YoY, IndusInd Bank (IIB) reported strong Q1FY24 PAT at Rs21.24bn (up ~32% YoY) driven by strong NII (up 18% YoY) and ~21% YoY dip in provisions. As detailed in our recent sector note (Link), IIB is our preferred pick and the thesis remains intact. We believe IIB is uniquely placed as growth (18-19% YoY for FY24-25E) has tailwinds from revival in key domains (vehicle and MFI) which due to strong yields should also enable stable NIM. With sharp reduction in RSA (down to 66 bps) and macro tailwinds, we see healthy moderation in credit costs, driving RoA higher.
Outlook
Overall, we estimate the bank delivering 1.85%-1.9% RoA for FY24-25E with 15-16% RoE. We increase our target price to Rs1,700 (vs Rs1,550), valuing the stock at ~1.9x (vs ~1.7x) FY25E ABV. Maintain BUY.
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