Target: ₹1800
CMP: €944.70
IndusInd Bank is a new generation private sector bank. The bank has a pan-India presence, with around 2,631 branches as of Sep 23. The bank has delivered a healthy performance in Q2FY24, with PAT growing 3 percent quarter-on-quarter and 22 percent year-on-year.
NII growth was mainly driven by strong lending growth (21 percent yoy and 5 percent qoq), while the margin remained stable at 4.3 percent qoq.
With its strategy aimed at limiting the rise in cost of funds (COF), the bank aims to maintain its NIMs at the current level of 4.2-4.3 percent in the coming quarters. Going forward, in combination with a robust expansion of the loan portfolio, we expect an improvement in profitability.
Asset quality remained stable over the quarter sequentially, with GNPA at 1.93 percent (vs. 1.94 percent in Q1 2024) and NNPA at 0.57 percent (vs. 0.58 percent in Q1 2024). first quarter of 2024). It is striking that the PCR remained stable at a level of 71 percent. The restructured portfolio amounted to 54 basis points, compared to 66 basis points in 1Q24.
In the future, the bank is expected to grow by 18 to 23 percent. The bank is witnessing strong demand in the CV financing book and in the MFI portfolio. The bank experiences tremendous opportunities in the MSME space.
Key risk factors: Margin compression; Moderate growth.
