Reduce IndusInd Bank, target price Rs 1060: HDFC Securities

HDFC Securities has reduce call on IndusInd Bank with a target price of Rs 1060. The current market price of IndusInd Bank is Rs 1217.

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
Given the bank's historically sub-par/non-sticky deposit profile, HDFC Securities believes the bank would continue to face challenges in a deposit-constrained environment. The brokerage tweaks its FY23E/FY24E estimates to factor in lower credit costs, partly offset by downward pressure on NIMs. The brokerage maintains a REDUCE with a revised target price of Rs 1,060 (1.3x Sep-24 ABVPS).

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.