Indusind Bank - Strong Core Operating Performance - Motilal Oswal

INDUSIND BANK 3QFY11: Strong core operating performance; Margin up 20bp QoQ aided by capital raising

53% growth in NII to Rs3.6b as loans grew 31% YoY and margin expanded 67bp YoY (up 20bp QoQ).

Strong core fee income growth of 54% YoY due to traction in forex and investment banking related fees, and Fall in cost to core income ratio to 48% vs 51% a year ago.

GNPA in absolute terms increased 7% QoQ and NNPA increased 9% QoQ. PCR (cal) stood at ~70% (stable QoQ)

Rapid branch network expansion, acquisition of new customers and deepening of existing customer relationships would help ensure that its asset growth remains higher than industry and would also strengthen liability profile. On account of recent equity raising, RoEs would be subdued at ~ 18% for FY12E and 20% for FY13E. The stock trades at 2.4x FY12E BV and 2.1x FY13E BV and 14.4x FY12E EPS and 11.2x FY13E EPS. Not Rated.

Source : Equity Bulls

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