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Motilal Oswal Report
IndusInd Bank Ltd. reported an in-line Q4 FY24 performance. Profit after tax grew 15% YoY to Rs 23.5 billion (in line), aided by healthy revenue growth and lower provisions (aided by reversal of Rs 3 billion of contingent provisions).
Loan growth was healthy at 18.4% YoY to Rs 3.4 trillion, with healthy traction in the consumer finance segment. Deposits grew 14.4% YoY to Rs 3.8 trillion, led by term deposits. The current account savings account ratio moderated 61 basis points QoQ to 37.9%.
Fresh slippages moderated ~19% QoQ to Rs 14.3 billion, primarily driven by a decline in slippages in the corporate book to Rs 1.6 billion and consumer finance book to Rs 12.7 billion. Gross non-performing assets/net non-performing assets ratios remained stable at 1.92%/0.57%. Restructured book declined 8bp QoQ to 0.4%.
We estimate IndusInd Bank to deliver a ~21% earnings compound annual growth rate over FY24-26, leading to return on assets/return on equity of 2.1%/16.8% by FY26. We reiterate our 'Buy' rating on the stock with a target price of Rs 1,850.
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