Buy IndusInd Bank, target Rs 2248: Siddharth Sedani

Siddharth Sedani

IndusInd Bank continues to report robust operating performance after having absorbed the high NPA divergence reported this quarter, keeping profitability intact. Low credit costs, steady NIM and high credit growth would keep profitability high through FY19-20. The strategic BHAFIN deal would be synergistic in the medium term. We expect the bank to maintain stable asset quality over FY19- 20, aided by its well-diversified loan mix.

We expect slippages from the corporate book to shrink as the bank increases its exposure to higher-rated corporate bodies. Thus, we model a gross-NPA ratio of 0.97percent in FY20.

We factor in 26 percent overall credit growth through FY19-20. The corporate book was largely driven by gaining market share from PSBs and working-capital loans to better-rated corporate bodies. With a pick-up in CV growth expected in FY19, retail advances could be buoyant.

Disclaimer:The author is Vice President – Equity Advisory, Anand Rathi Shares and Stock Brokers. The views and investment tips expressed by investment experts/broking houses/rating agencies onMoneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Jun 7, 2018 02:19 pm

Leave a Reply

Your email address will not be published. Required fields are marked *