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IDBI Capital Report
IndusInd Bank Ltd. consistently maintained the net interest margins (at 4.3%) for last five quarters backed by improvement in yields. Credit growth remains strong led by growth across the segments.
We expect 18% compound annual growth rate (FY23-26) loan growth backed by retail portfolio. Deposit growth slowdown further, while management guided for credit-deposit ratio to remain in the historical range of 85-90%.
Micro finance institution portfolio which remains key concern area reported stable gross non-performing asset (at 4.4% versus 4.5% QoQ).
Profitability remains strong led by lower credit cost as management utilized Rs 2.20 billion of contingent provisions.
IndusInd Bank maintains overall provision of Rs 13 billion as contingent provisions.
We have moved to FY26E estimates and expect earnings per share to grow at 18% CAGR (FY23-26).
We maintain ‘Buy' rating with a new target price of Rs 1,900 (Rs 1,675) at price/adjusted book value of 1.9 times FY26.
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