IndusInd Bank - On The Mend With Recovery In Sight: Prabhudas Lilladher

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Prabhudas Lilladher Report

Key highlight of IndusInd Bank Ltd.'s analyst meet was that focus is on strong asset growth that would be funded by retail term deposit while underwriting has been tightened so as to keep stress formation controlled.

IndusInd Bank's branch expansion and investments in technology may keep opex elevated, though pre-provision operating profit to loan ratio may surpass 5.5% (over planning cycle-six) from 5.3% in FY22.

Expanding in home markets would be a key driver to business growth. IndusInd Bank is targeting a current account and savings account ratio of more than 45% while retail to wholesale loan mix could change from 52:48 to 60:40.

Better earnings quality is also a focus area. While asset growth may be achievable, material RTD growth might not be easy given tightened systemic liquidity. However, asset quality risks have abated and return on equity improvement from 10% to 15% over FY22-24E warrants a higher valuation.

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