IndusInd Bank Ltd - Continues to defy tough operating environment - Emkay

Reco: ACCUMULATE
CMP: Rs 487
Target Price: Rs 540

- IIB's Q4FY14 NII at Rs7.8bn (+18% yoy); broadly in line with consensus. Net profit at Rs4bn (+29% yoy) beats estimates by ~6% due to higher other income led by trading gains

- Within other income, investment banking now contributes 13-14% of other income and almost 11% of PBT. Lumpiness in this business could be a risk to overall earnings

- NNPA at Rs1.8bn grew 12% qoq; though slippages remained high at 1.8bn or 1.4% annualised, they remain in line with our estimates. PCR has declined to 70%.

- Raising FY15/16E PAT estimates by 9/12% due to better margins and lower credit costs. At CMP, stock quotes at 2.6x/2.2x of its FY14E/FY15E ABV. Maintain ACCUMULATE

Source : Equity Bulls

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