ICICI Direct has given Buy recommendation for IndusInd Bank with a target price of Rs. 1100 in its research report issued on May 03, 2021
ICICI Direct’s research report on IndusInd Bank
IndusInd Bank posted modest results in Q4FY21 on the business growth front while asset quality showed a sequential improvement. On the operating front, numbers were in line with our estimates. Net interest income increased 9.4% YoY and 3.8% QoQ to Rs 3535 crore with stable NIMs at 4.1% QoQ. Margins remained stable as excess liquidity had a drag on benefit of reduction in cost of funds. Other income was up 4.4% QoQ, driven by 9% QoQ uptick in core fee income. In turn, this was boosted by 24% QoQ rise in retail fees. Cost-to-income increased 56 bps QoQ to 42.4% as opex increased due to revival in business activity. The bank during the quarter made provisions worth Rs 1866 crore and was flattish QoQ. Net profit came in at Rs 876 crore and was in line with our estimates.
We upgrade our target price at Rs 1100 (earlier Rs 1050), valuing the stock at ~1.9x FY23E ABV. We maintain BUY recommendation.