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MOSL: Morning India (12/July/17)- 1. IndusInd Bank 1QFY18 (Mixed asset quality)- 2. South India Bank-3. 1QFY18 Consumer Preview

​MOrning India (12/July/17): 1. IndusInd Bank 1QFY18 (Mixed asset quality); 2. South India Bank; 3. 1QFY18 Consumer Preview

Today’s top research idea

IndusInd Bank: Mixed asset quality; strong operating performance

IIB’s 1QFY18 PAT grew 31% YoY to INR8.4b. Strong loan growth of 24% YoY and steady NIM at 4% drove robust NII performance (+31% YoY; 5% beat).

Robust NII performance and strong fee income growth (25%+) enabled the bank to deliver impressive 29% core PPoP growth. Both corporate (+26% YoY) and consumer (+22% YoY) loans exhibited healthy growth.

GNPAs increased 21% QoQ to 1.1% of loans (0.9% in FY17), led by high slippages in both CCB and CFD divisions.

Strong core profitability, an improving CASA profile and healthy return ratios (RoA of 1.9%+ and RoE of 16-18%) are the key positives. We largely maintain our estimates.

Maintain Buy with a target price of INR1,800 (3.8x June 2019E BV).

Liquor ban not applicable along denotified highways in cities: Supreme Court

In a major concession for hotels and restaurants hit by the recent Supreme Court ruling banning any liquor joint along 500 metres of any state or national highways, the apex court on Tuesday clarified that any such executive action would not fall foul of the law if the highway was within the city limits.