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ICICI Securities Report
We believe that IndusInd Bank Ltd. is well placed on growth and net interest margin. Despite slower-than-expected Q1 FY25 credit growth, as per its provisional business update, we estimate ~18% loan CAGR for FY24–26E.
The bank is also well placed on the interest rate cycle with higher share of fixed-rate loans. Overall, we see the bank delivering amongst highest net interest income and pre-provision operating profit growth driven by steady NIMs and superior growth.
We estimate FY25–26 RoA at ~1.9%, which is significantly higher than its last ten-years average (~1.6%) while valuations at ~1.4 times FY26E adjusted book value are much more attractive.
Maintain Buy and target price of Rs 2,000, based on ~1.9 times FY26E ABV.
Key risks: Any moderation in loan growth; and less-than-full-term extension for the incumbent MD and CEO.
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