‘Buy’ on IndusInd with price target of Rs 1,250
时间:2024-06-28 23:41:31 阅读(143)
The Q1 profit of IndusInd Bank at `1,600 crore rose 64% YoY and was ahead of our estimate with stronger fees and lower credit cost. The loan growth improved to 18% YoY and NIMs rose, but the lender needs to improve on share of retail deposits from 41%. Slippages were expectedly higher due to slips from restructured loans (2.1% of loans), but this should moderate from here. Turnaround is in play and improving ROA/growth to aid rerating — IndusInd is among top picks.
Slippages rise from restructured loans, but within expectations and buffers: The bank saw an 8% QoQ rise in slippages on the back of delinquencies from restructured loans (41% of slippages). Overall delinquency ratio was at 4.3% of past year loans (annualised) and 15% of restructured loans (as of March 2022) slipped during the quarter. This was in line with our expectations and could be absorbed partly within new provisions and draw-down from buffer provisions. As a result of slippages and no sale to ARCs, gross NPLs rose 8% QoQ to 2.4% of loans and the coverage ratio was stable at 72%. Restructured loans at 2.1% of loans are higher, but we expect slippages from restructured loans to moderate. Hence, the stress can be absorbed within buffer provisions at 1.2% of loans. This should help to drive moderation in credit cost from 3% in FY22 to 1.7-2% of average loans in FY23-24.
Maintain ‘buy’: We lift earnings a bit as we factor better fees and believe that the lender is a good turnaround story with improvement in growth and ROA trends, aided by moderation in credit costs. We maintain IndusInd Bank among our top picks in financials with a ‘buy’ call. The price target is `1,250 based on 1.5x June-24E adjusted PB.
下一篇:Wipro, Tata Elxsi, Yes Bank, PNB, Lupin, Tata Power, Rail Vikas Nigam stocks in focus on F&O expiry
猜你喜欢
- Senco Gold IPO subscribed 0
- Rising cost of imported coal may impact power tariffs
- Rising crude, USD, double whammy for economy; inflation may not subside this yr as oil prices may remain high
- Sebi seeks regulating fractional ownership platforms
- Rupee likely to appreciate amid retreat in dollar, declining crude prices and rise in risk in equity markets
- Wall Street stocks decline, S&P 500 finishes lower after wiping out 1% rally; treasuries climb
- Volatile October likely for markets, short positions to influence Nifty
- Rupee falls 17 paise to close at 82
- Rupee continues to trade weak against USD; interest-rate decisions, IIP, CPI, China’s GDP in focus