IndusInd Bank stock: The fifth-largest private bank in India, IndusInd Bank is a newer private sector bank supported by the Hinduja group. Its shares broke its one-year peak of ₹1,618 and reached a new 52-week high of ₹1,650.7 apiece in today’s trade. The bank’s quarterly update for 3QFY24 was released on Wednesday, which coincided with the share price surge.
With net advances of ₹2,72,754 crore in Q3FY23, the bank’s net advances for the December quarter increased by 20% to ₹3,26,741 crore.” Q2FY24 saw net advances of ₹3,15,454 crore in the previous quarter. – IndusInd Bank stock
In 3QFY24, the bank’s CD ratio climbed to 88.6%, up 82 basis points on a quarterly basis. A healthy 2.6% QoQ and 13.4% YoY increase in deposits to ₹3,68,955 crore was reported. However, as per the bank’s exchange filing, the CASA mix in deposits decreased by 90 basis points on a QoQ basis and 350 basis points on a YoY basis to 38.5% in Q3FY24.
We anticipate that the robust loan growth trend reported by the IIB will continue, which should help margins in the future. Motilal Oswal, a domestic brokerage firm, stated that the deposit franchise is expanding steadily and that the goal is still to increase retail deposits.
In addition to adding a number of granular growth levers like affordable housing, Bharat Super Shop, and used cars, the bank has strong moats in vehicle finance (VF) and microfinance (MF).
Bullish outlook
ICICI Direct Research began covering the stock earlier in December, citing the bank’s focus on important parameters and its targeted lending approach, with a particular emphasis on mid- and small corporates in the wholesale segment and the auto segment in the consumer segment. The research firm set a target price of ₹1,800 per share.
With an emphasis on enhancing granularity across the balance sheet in the planning cycle from FY23–26E, IndusInd Bank has targeted improvement across parameters, including credit and deposit growth. With ongoing investments in developing distribution capabilities, customer acquisition continued to be the main area of focus. Additionally, enhancing profitability remained a primary goal of the plan, as did creating a contingency buffer and increasing provision coverage, according to the brokerage.
The brokerage claimed that the bank has taken a balanced tack in growing its footprint in the retail market, putting equal emphasis on growth and yields. As a result, the bank has entered the credit card and personal loan markets, which the brokerage believes will boost yields.
Furthermore, it is expected that the recent entry into the home loan market will promote expansion and enhanced client relations. The brokerage anticipates overall credit growth of 18–20% in FY24–26E, with a persistent shift in the business mix in favor of the retail sector.
