Hold IndusInd Bank - TP Rs.340 - Geojit BNP Paribas

Hold on IndusInd Bank - TP Rs.340

- Maintain 'hold' rating on IndusInd Bank with an unchanged target price of Rs.340

- The bank reported strong operating performance for 4QFY12.

- Net profit at Rs.223.4 crore increased 30.1% yoy. Net interest income (NII) at Rs.464.4 crore increased 19.7% yoy. Both the numbers are above analysts' estimates.

- NII growth was supported healthy advance growth of 34%.

- As expected net interest margin (NIM) bottomed in 3QFY12 and improved 4bps qoq to 3.29%.

- Consumer finance division (CFD) continues to drive loan growth and leads to qoq NIM expansion. Loan mix continued to change in favor of CFD and now at 49.2% due to strong overall loan growth.

- Corporate and commercial banking (CCB) loans increased 22.5% yoy. Due to healthy loan growth in CFD and CCB divisions, NIM is expected to improve 23bps in FY13.

- Saving rate deregulation has benefited IndusInd and savings deposit grew 18% qoq in 4QFY12 and this trend is expected to continue and support loan growth in fixed rate CFD book.

- Branch addition is strong. 35 branches opened in 4QFY12.

- Earnings outlook is healthy and valuation is fair.

- Maintain 'hold' rating with the same target price of Rs.340.

Source : Equity Bulls

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