IndusInd Bank Ltd - Future "prospects" outweigh near term concerns - Emkay

Reco: ACCUMULATE
CMP: Rs 429
Target Price: Rs 481

- Massive expansion plans, adequate capital, proven track record and sound management put Indusind Bank in strong position to ramp up its growth when macro turns favourable

- Expanding branch network, with seasoning of existing branches is expected to result in improvement in CASA ratio, leading to margins expansion by 13bps

- We are factoring in rise in credit cost by 15bps, due to higher slippages compared to previous years. Despite that RoA to remain stable at 1.6% due to improvement in NIMs

- At CMP, the stock is valued at 2.1x of its average ABV of FY15E-16E, 15% discount to its average multiple of 2.4x. Initiate with Accumulate rating and target price of Rs481.

Source : Equity Bulls

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