Emkay Global Financial has given Buy recommendation for Indusind Bank with a target price of Rs. 1275 in its research report issued on Jul 28, 2022
Emkay Global Financial Market’s research report on Indusind Bank
The bank hosted an analyst meet to showcase its reorganized management profile, give an update on Planning Cycle 5 and provide some insights into Planning Cycle 6. The KTAs: Well on course to achieve PC 5 goals despite Covid shock; PC 6 to focus on building scale with profitability and sustainability: Under the Planning Cycle (PC) 5, the bank has fortified its retail liability franchise, fine-tuned its corporate banking business, launched the holistic Bharat Banking model, ramped up digital compatibility and initiated new growth boosters (Home/gold loan) and completed management reorganization. Under PC 6, it plans to further improve its CASA ratio to >45%, re-accelerate growth across consumer/corporate banking segments with continued focus on market share gains, granularization & higher RoRWA, and launch investment/para-banking (Broking, AMC, etc.), thus delivering PPOP/loans of >5.5% on a sustainable basis.
Outlook
Retain Buy with a TP of Rs1,275 (valuing core bank at 1.7x Jun’24E ABV). Key risks: Delayed assetquality normalization and senior management attrition.