IndusInd Bank Q3 Results Review: IDBI Capital Maintains 'Buy' On The Stock, Lowers Target Price — Here's Why

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IDBI Capital Report

IndusInd Bank Ltd. reported decline in net interest margins led by interest reversal due to higher slippages from MFI portfolio. MFI portfolio remained flat QoQ as disbursement’s picked up during Q3 FY25 which resulted in a loan growth of 12% YoY vs 13% YoY (Q2 FY25).

We expect credit growth at 15% CAGR (FY25-27). Deposit growth remains slower at 11% YoY vs 15% YoY (Q2 FY25). Management guided for improvement in credit growth as MFI portfolio disbursements increases.

MFI portfolio which remains key concern area reported rise in GNPA (@7.05% versus 6.54% QoQ). Profitability was impacted by higher credit cost as NPA inch up due to MFI. Thus, we have revised downwards the estimates and rolled over to FY27E.

IndusInd Bank still has contingent provisions (Rs 13 billion) which should provide cushion to P&L from MFI NPA. We maintain ‘Buy’ rating with a target price of Rs 1,400 (earlier Rs 1,650) at P/ABV of 1.4x FY27E.

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