IndusInd Bank - Institutional Research Desk at HDFC Securities

Sub-optimal deposit momentum untenable

IndusInd Bank (IIB) reported its highest-ever quarterly earnings, largely on account of steady loan growth (+19% YoY), stable margins, sustained traction in fee income and lower credit costs (1.7% annualised). Gross slippages at 2.3% witnessed some deterioration in the CV/CE portfolio and partial fallout from the restructured book, ex of which the back-book appears to be incrementally stabilising. IIB managed to garner retail deposits in the form of CA and TD from select affluent and NRI pockets, resulting in an overhang on its funding costs. Given its historically sub-par/non-sticky deposit profile, we believe IIB would continue to face challenges in a deposit-constrained environment, given the narrowing wedge with loan growth. We tweak our FY23E/FY24E estimates to factor in lower credit costs, partly offset by downward pressure on NIMs. We maintain REDUCE with a revised TP of INR1,060 (1.3x Sep-24 ABVPS).

Shares of IndusInd Bank Limited was last trading in BSE at Rs. 1202.30 as compared to the previous close of Rs. 1199.45. The total number of shares traded during the day was 79371 in over 3595 trades.

The stock hit an intraday high of Rs. 1227.95 and intraday low of 1199.25. The net turnover during the day was Rs. 96257107.00.

Source : Equity Bulls

Keywords

IndusIndBank INE095A01012 Q3FY23 ResultUpdate HDFCSecurities