KR Choksey has given Buy recommendation for IndusInd Bank with a target price of Rs. 1387 in its research report issued on May 03, 2022

KR Choksey’s research report on IndusInd Bank

In Q4FY22, Net Interest Income (NII) increased 12.7% YoY to INR 39,852 Mn. NIMs stood at 4.4% for Q4FY22. For the full year FY22, NII stood at INR 1,50,008 Mn, a growth of 10.9% YoY. PPoP grew 8.7% YoY in Q4FY22 at INR 33,285 Mn. Other income at INR 19,050 Mn for the quarter as against INR 17,800 Mn for Q4FY21, grew by 7% YoY. Core Fee grew by 9% to INR 16,440 Mn. The operating profits for FY22 was reported at INR 1,28,386 Mn, an increase of 9.5% YoY. PAT for Q4FY22 stood at INR 13,614 Mn growing by 51% YoY led by decent operating performance and lower provisions. For the full year PAT stood at INR 46,111 Mn with provisions at INR 66,650 Mn. The increase in PAT for FY22 was 64% YoY. For Q4FY22, Advances grew at 12.4% YoY at INR 23,90,515 Mn, while deposits grew 14.6% YoY at INR 29,36,814 Mn. CASA ratio improved 106 bps YoY to 42.8%.

Outlook

IndusInd Bank shares are currently trading at a P/B multiple of 1.3x on adj. FY24E book value and we expect the valuation to re-rate with performance improvement. We continue to apply a P/B multiple of 1.9x to the FY24E adj. BVPS of INR 744 to maintain our target price of INR 1,387 per share (unchanged), an upside of 36.2% over the CMP. Accordingly, we maintain our rating on the shares of IndusInd Bank to “BUY.”

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