IndusInd Bank - March 2013 Results Preview - Motilal Oswal

- Growth in CV segment is expected to moderate. However, introduction and traction in new products - LAP and credit card - will drive growth in consumer finance portfolio. In corporate segment, growth is expected to be driven by working capital, and we expect overall loan growth of 25% for FY13E.

- IIB has raised INR20b of capital due to which margins are likely to improve by 25bp. Further, some benefit of lower bulk deposit rates would help NIMs.

- Fee income growth is expected to be strong at ~29% YoY.

- Stress in CV segment has increased in the recent months. However, we expect bank's asset quality to remain healthy and thereby credit cost would be contained. We factor credit cost of ~0.5%.

- The stock trades at 2.4x FY14E and 2.1x FY15E BV, and 15.5x FY14E and 12.2x FY15E EPS. Maintain Buy.

Source : Equity Bulls

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