MOSL: INDUSIND BANK (Buy)-Concerns abating; marching toward ‘business as usual’
IndusInd Bank: Concerns abating; marching toward ‘business as usual’
(IIB IN, Mkt Cap USD13.1b, CMP INR1518, TP INR1900, 25% Upside, Buy)
- IIB reported PAT of INR3.6b (our estimate: INR5.3b) in 4QFY19, affected by higher provisions of INR15.6b (INR11.2b toward IL&FS). NII growth moderated to 11% YoY led by interest reversal of INR1.5b, while the NIM shrank to 3.59% (3.84% without interest reversals). For FY19, NII/PPoP grew 18%/22%, while PAT declined 8.5% YoY to INR33b.
- Total income increased 18% YoY, led by healthy other income growth of 29% YoY. Core fees rose 28% YoY, led by forex income and loan processing fees. Opex growth (+19% YoY) was slightly higher, leading to PPoP growth of 17% YoY. IIB guided for a C/I ratio improvement of 150bp to 42% over FY20.
- Loan growth stood at 29% YoY, led by robust traction across both corporate and consumer portfolios. The share of retail loans in total book stands at 39% (52% incl. MFI & business banking). Deposit growth, too, picked up sharply to 29% YoY (11% QoQ), driven by healthy accretion across CA, SA and term deposits.
IndusInd Bank's business lines include Corporate Banking, Retail Banking, Treasury and Foreign Exchange, Investment Banking, Capital Markets, Non-Resident Indian (NRI) / High Networth Individual (HNI) Banking, and (through a subsidiary) Information Technology. Co. provides multi-channel facilities including ATMs, Net Banking, Mobile Banking, Phone Banking, Multi-city Banking and International Debit Cards. Co. is part of Reserve Bank of India's Real Time Gross Settlement (RTGS) system. Co. has approximately 150 ATMs of its own, and has concluded multilateral arrangements with other banks with a total network of 15,000 ATM outlets.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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