IndusInd Bank (IIB), yet again, delivered a top quartile performance across parameters. Net profit grew by 25% y-o-y and stood at Rs 936 crore. Loan book grew at 25% y-o-y. The ratio of corporate to consumer loans stood at 52:48. Advances recorded a steady growth of 25% y-o-y , while deposits grew by 23% y-o-y. Consumer finance growth stood at 24% y-o-y & 6% q-o-q and corporate loan book grew at 26% y-o-y & 6% q-o-q. On the deposits front, the CASA grew above industry at 42% y-o-y and stood at R62,616 cr. In the current quarter bank added 70 branches and 16 ATM’s taking the total number of branches to 1,320 and total number of ATMs to 2,162. NII growth for the quarter stood at 25% backed by lower cost of deposits. Other income grew at 17% y-o-y and stood flat on sequential basis. RoA increased at 1.96% with RoE increased to 16.96% vs. 16.48% on sequential basis. C-I ratio increased to 45.98% vs. 45.7% q-o-q.
Net Interest margin stood steady at 4.0%. The yield for consumer finance stood at14% y-o-y while that for corporate book stood at 8.96%. Asset quality for the bank deteriorated with GNPAs at 1.16% levels and NNP As at 0.46% for the quarter, against 0.46% and 0.44% in the previous quarter. Low exposure to stressed assets, diversified and granular book & smaller restructured book (15 bps) restores comfort on asset quality. Provision coverage ratio stood steady at 60%. Restructured advances for the quarter stood at 0.15%. IndusInd Bank has continued to show sustained progress across all vectors. At current growth rates bank will achieve Phase-4 targets well in time. At CMP of R1,709 the stock is trading at 3.7(x) its FY 19E ABV. We have ‘HOLD’ rating with a price target of R1,875 based on 4.1(x) its FY 19E ABV.
