BSE Index Analysis, Securties , Standard Experts
IndusInd Bank : Core Fee And Low Credit Cost Lift PAT......
Reco : Buy
Cmp : 345
Target : 380
IndusInd Bank(IIB) net profit grew 30% YoY to Rs 2.2 bn in line with our expectations supported by healthy core fee income (up 60% YoY). Net interest income grew 20% YoY led by 34% YoY increase in loan growth. NIM at 3.3% witnessed 4 bps QoQ improvement led by 12 bps QoQ increase in yields on advances.
Advances growth was led by retail loans plus other retail finance⊩ncreased 48% YoY and now forms 49% of total loans (vs 48% in Dec-11) and is in-line with managementⳊstrategy of increasing share of retail portfolio. Although deposit growth at 23% YoY (and 4% QoQ) lagged advances growth, savings account balances gained traction with 18% QoQ growth. Asset quality remained stable with gross NPA ratio at ~1% with low credit cost at 41 bps.
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Maintain BUY with revised TP of Rs 380 (Rs 346 earlier)
Business growth momentum was maintained with improved margins, strong fee, and stable asset quality. The continued rise in secured retail share augurs well for NIM. Yields on advances would be further supported due to the fixed nature of its retail portfolio, which would benefit in a declining interest rate environment. Moreover, traction in saving balances along with new customer acquisitions will help increase the CASA base.
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