IndusInd Bank Ltd - Q2FY15 Result First-Cut - Microsec

IndusInd Bank Ltd. has announced its Q2FY15 result on 13th October 2014.

The Bank's total income increased by 1.04% QoQ and 24.60% YoY to INR1391.38 crores, driven by 19.03% and 33.96% YoY growth in its Net Interest Income (NII) and Other Income (OI) respectively. Whereas, Profit After Tax (PAT) increased by 2.17% QoQ and 30.27% YoY to INR430.20 crores. During the qaurter, the Bank has decreased its Provision by 33.70% QoQ and 17.62% YoY to INR73.20 crores which has helped the Bank to maintained its Profitability on QoQ basis. For the half year ended H1FY15, Total Income increased by 22.13% YoY to INR2768.41 crores whereas, PAT increased by 28% YoY to INR851.29 crores.

The Bank's loan book and total deposits expanded by 22.39% and 24.39% YoY to INR59931.34 and INR65996.09 crores respectively. On the asset quality front, the Bank has improved its asset quality. GNPA improved by 3bps QoQ to 1.08% while, NNPA remained flat at 0.33%. Moreover, the Bank has improved its low cost deposits base, CASA ratio by 10bps QoQ and 164bps YoY to 33.40%. Moreover, the Bank is well capitalized to support its growth trajectory with 12.96% of its Basel III- Capital Adequacy Ratio (CAR), which is 396bps higher than the regulator's stipulated norm. Provision Coverage Ratio (PCR) stood at 69.40%.

At the CMP of INR637.40, the stock is trading at TTM P/BV of 3.54x. The current valuations of 3.26x FY15E and 2.74x FY16E Book Value looks attractive. We recommend a BUY on the stock with a target price of INR723 (3.12x FY16E BV) with an upside potential of ~14% from the current level with an investment horizon of 12 months.

The Banks' strong fundamentals couple with rising retail franchise and the expectation of revival in the vehicle loan portfolio going forward boosted our confidence on it.

Source : Equity Bulls

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