Buy IndusInd Bank, target price Rs 1473: LKP Securities

LKP Securities has buy call on IndusInd Bank with a target price of Rs 1473.The current market price of IndusInd Bank is Rs 1211.65. Time period given by analyst is a year when IndusInd Bank price can reach defined target.

IndusInd Bank, incorporated in the year 1994, is a banking company (having a market cap of Rs 95085.27 Crore).

IndusInd Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 11533.89 Crore, up 7.60 % from last quarter Total Income of Rs 10719.20 Crore and up 19.97 % from last year same quarter Total Income of Rs 9614.34 Crore. The bank has reported net profit after tax of Rs 1963.64 Crore in latest quarter.

Investment Rationale
IndusInd Bank has reported stable set of numbers and the positives are 68% YoY jump in reported profit, led by NIMs expansion (4.27%) and lower provisioning expenses (down36% YoY), strong business growth (credit: 19.3% YoY, Deposits: 14.3% YoY) and stable provision coverage ratio (PCR) level among others.

Nevertheless, the spike in consumer GNPA (2.6% v/s 2.36%) is the biggest disappointment. The brokerage believes, the bank has made adequate provisioning against potential stress. However, the delinquencies from vehicles segment and credit cost in next quarter will be keenly watched. The brokerage has a positive outlook on the bank and thus assigns it a BUY rating.

Promoter/FII Holdings
Promoters held 16.51 per cent stake in the company as of 31-Dec-2022, while FIIs owned 45.83 per cent, DIIs 24.46 per cent.