IndusInd Bank Q1 Results Review: Earnings In Line, Loan Growth Momentum To Continue
The bank's first-quarter profit rose 30% YoY to Rs 2,124.5 crore, beating Bloomberg estimate of Rs 2,094.6 crore.
IndusInd Bank Ltd.’s healthy first-quarter earnings were in-line with market expectations, mainly driven by high core income and lower provisions, according to analysts.
The private lender’s first-quarter profit rose 30% year-on-year to Rs 2,124.5 crore, according to an exchange filing on Monday. This is marginally higher than the Bloomberg estimate of a net profit of Rs 2,094.6 crore. Net interest income increased 18% to Rs 4,867 crore.
The bank’s asset quality was steady. The gross non-performing asset ratio fell sequentially to 1.94% quarter-on-quarter, whereas, the net NPA ratio remained flat at 0.58% when compared with 0.59% as of March 31.
Here is what analysts said about IndusInd Bank's Q1FY24 results:
Morgan Stanley:
Deposit costs rose sequentially, primarily due to repricing of term deposits, higher SA deposit rates, and a moderation in the CASA ratio.
Vehicle loan book growth is healthy at 21% year-on-year, led by strong disbursements in CVs, UVs, and cars. However, disbursements for the tractor and 2Ws were muted.
We see strong potential for revenue growth acceleration and credit cost moderation as rate cycles have peaked.
Maintain ‘overweight’ with a target price of Rs 1,800.
Jefferies:
There is scope for a 20% CAGR in loans due to high costs of funds and an increased share of retail deposits.
A slight rise in NIMs, mainly due to a rise in the share of retail loans and the peaking out of funding costs.
The bank’s premium on term deposit rates over larger private banks has widened and is monitorable.
Maintain ‘buy’, with a target price of Rs 1,750.
Motilal Oswal:
Within the consumer book, the growth was broad-based, with note-worthy performance in utility vehicles and credit card segments, up 44% and 39% year-on-year, respectively.
Fresh slippages declined 14% quarter-on-quarter, mainly driven by a reduction in slippages in the corporate book.
Moderation in credit costs is expected to aid the return on asset expansion.
Maintain ‘buy’, with a revised target price of Rs 1,600, implying an upside of 15%.
DAM Capital:
FY24 opex is expected to be elevated due to the scaling up of new products and investment in tech.
Consumer slippages elevated at 3%, mainly due to consumer loans, owing to the seasonality in vehicle and consumer credit.
Expect the bank to have a gradual recovery in asset quality with lower provisions and robust growth, up 22–24% over FY24–FY25.
Maintain ‘buy’, with a target price of Rs 1,605.
