Should you invest in IndusInd Bank post Q1 results?

By: | Updated: June 7, 2017 5:23 PM

Brokerage houses like JM Financial and KR Choksey Shares and Securities are recommending IndusInd Bank shares after the bank reported 26 per cent rise in standalone net profit at Rs 661.38 crore for the first quarter ended June.

Sensex, Nifty, BSE, NSE, indusind bankBrokerage houses like JM Financial and KR Choksey Shares and Securities are recommending IndusInd Bank shares after the bank reported 26 per cent rise in standalone net profit at Rs 661.38 crore for the first quarter ended June. (Reuters)

Brokerage houses like JM Financial and KR Choksey Shares and Securities are recommending IndusInd Bank shares after the bank reported 26 per cent rise in standalone net profit at Rs 661.38 crore for the first quarter ended June. The private sector lender had made a net profit of Rs 525.04 crore in the corresponding a year ago.

In the past one year, IndusInd Bank shares gained 21.65 per cent to Rs 1123.95 on July 11, 2016 whereas BSE Sensex plunged 1.20 per cent during the same period.

Total Income of the bank jumped by 22.37 per cent year-on-year to Rs 4264.66 crore for the quarter under review. The bank had posted total income of Rs 3485.11 crore in the same quarter last year.

On asset quality, bank’s gross non-performing assets (NPAs) stood at 0.91 per cent of the gross advances as of June 2016, up from 0.79 per cent a year ago. Net NPAs were 0.38 per cent of net advances during the quarter, up from 0.31 per cent in the same quarter a year ago.

JM Financial in a research report said, “Aided by robust loan book growth and expansion in margins, the bank witnessed a strong NII growth of 38 per cent year-on-year. We expect earnings to grow at 29 per cent CAGR over FY16-18E driven by strong loan growth of over 25 per cent and improving margins and cost ratios.” The brokerage house has 12 target price of Rs 1,350 for IndusInd Bank.

KR Choksey said, “IndusInd Bank is seemingly mirroring the quality depicted by couple of top league private banks. Hence, the bank continues to demand higher multiples and has enjoyed re-rating good number of times. While the stock has run-up another 20 per cent odd over the last quarter on expected lines, given the further scope for NIM expansion, strong growth visibility with higher return on asset, we believe it deserves a higher multiple.” The brokerage house upgraded IndusInd Bank shares to Rs 1,352 from Rs 1,203.

On Tuesday, shares of the bank were trading 0.36 per cent higher at Rs 1,128 in the afternoon trade.

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