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IndusInd Bank - Q2FY21 Result Update - ICICI Securities
Posted On : 2020-11-02 14:17:35( TIMEZONE : IST )
The overall asset quality performance was encouraging as GNPA and NNPA ratio declined by 32 bps and 34 bps to 2.21% and 0.52%, respectively. Even on a standstill asset classification, asset quality performance remained healthy as GNPA and NNPA were at 2.32% and 0.61%, respectively. Application for restructuring is minimal at ~5 bps of advances and is further expected to remain in low single digits at the end of December 2020. The bank witnessed lower delinquencies in Q2FY21 as account of Rs. 399 crore slipped into NPA compared to Rs. 1537 crore in the previous quarter. Slippages from the corporate book were miniscule at Rs. 13 crore while remaining Rs. 386 crore came in from the consumer segment. SMA 1, 2 book were at ~23 bps, 10 bps, respectively. Collection efficiency for September 2020 was at 94.7% and 95-96%, respectively, in October 2020, which is further expected to improve further.
Valuation & Outlook
Post balance sheet realignment, the management is geared to pedal growth ahead with focus on certain segments. Thus, we expect business momentum to pick from here on with operational parameters expected to show improvement. Improving collection efficiency and ample provision buffer is expected to arrest volatility in earnings but return ratios are seen improving gradually to 9.3% in FY22E. Further, quantum of advances to be restructured remain key monitorable. Therefore, until clarity emerges on asset quality front, we maintain our HOLD rating with a revised target price of Rs. 625, valuing the stock at 1.2x FY22E ABV.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IndusInd_Q2FY21.pdf
Shares of INDUSIND BANK LTD. was last trading in BSE at Rs.585.6 as compared to the previous close of Rs. 588.7. The total number of shares traded during the day was 745533 in over 18388 trades.
The stock hit an intraday high of Rs. 601.95 and intraday low of 576.55. The net turnover during the day was Rs. 439499330.
