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Prabhudas Lilladher
IndusInd Bank (Accumulate)
CMP: ₹982.40
Target: ₹1,050
IndusInd Bank Ltd (IIB) is a Mumbai based Indian new generation bank, established in 1994. The bank offers commercial, transactional and electronic banking products and services. IndusInd Bank was inaugurated in April 1994 by the then Union Finance Minister Manmohan Singh. IndusInd Bank is the first among the new-generation private banks in India.
The bank started its operations with a capital amount of ₹100 crore among which ₹60 crore was donated by the Indian Residents and ₹40 crore was raised by the Non-Resident Indians.
IIB reported a steady quarter with Q4FY16 PAT growing by 25 per cent y-o-y to ₹620 crore (PLe: ₹622 crore). Other income continues to remain buoyant, while NII improved 37 per cent y-o-y to ₹1,268 crore, about 2 per cent ahead of our estimates. Margins improved by 3 bps q-o-q led by continued momentum in CASA mix and retail loan growth. IIB is now targeting NIMs of 4 per cent over the medium-term. GNPLs (gross non-performing loans) increased 38 per cent q-o-q led by slippages in consumer portfolio, while IIB sold assets worth ₹40 crore to ARC, while recovered ₹30 crore. We fine tune our earnings estimates and retain our PT at ₹1,050.
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