IndusInd Bank reported a net profit of Rs 1,035 crore in the quarter ended June, up 23.8% on-year backed by a rise in advances and net interest income. The core net interest income (NII) rose 20% to Rs 2,122 crore on the back of a 29% loan growth while the non-interest income moved up to Rs 1,301 crore from Rs 1,167 crore in the year-ago period.
Taking stock of the results reported in the latest quarter, CLSA said that NII growth at 20% is disappointing. The research firm sees headroom for repricing of loans. The brokerage firm expects 25% CAGR in profit over FY18-21. The firm has maintained a buy rating on IndusInd Bank shares with a target price of Rs 2,350. IndusInd Bank shares were trading at Rs 1,924.65 on Wednesday morning.
Macquarie noted that the company is demonstrating stability and pricing power. The research house has a target price of Rs 2,100 on IndusInd Bank shares. The banks’ revenue from retail banking grew by 25.5% to Rs 3,464 crore in the latest quarter, compared to the corresponding quarter in the previous year. Macquarie noted that the firm is managing its margins quite well. Brokerage firm CITI has raised the share price target to Rs 2,270, implying an upside of more than 17.5% from the current levels.
Another global brokerage firm Jefferies has maintained Hold rating on the stock with increased target price at Rs 1,815 (from Rs 1,690). “Acquisition of Bharat Financial & ISSL will shift earnings trajectory, but increased riskiness,” noted the firm. Further, it has changed EPS estimates by -1.8/1.3/-0.6 percent for FY19/FY20/FY21 and expects 25.4 percent EPS CAGR over FY18-21.
JP Morgan has a share price target of Rs 1,975. “Strong net income growth with underlying operating trends remained solid in Q1. The bank looks well positioned to deliver medium-term loan growth of 25 percent,” noted JP Morgan, adding that Bharat Financial merger will earnings’ accretive.