IndusInd Bank Q4 results review: What HSBC, Jefferies and other brokerages make of the lender's earnings report

The bank reported a 15 percent emergence successful nett net at ₹2,349 crore successful Q4FY24 versus a nett net of ₹2,043 crore successful the year-ago period. Meanwhile, nett loans grew 18 percent, outpacing the 14 percent maturation successful deposits.

Net involvement income - the quality betwixt involvement earned and paid - besides roseate 15 percent to ₹5,376 crore successful Q4FY24 portion the nett involvement borderline of the lender stood astatine 4.26 percent versus 4.28 percent past year.

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Its gross non-performing assets (GNPAs) fell to 1.92 percent successful Q4FY24 arsenic against 1.98 percent logged successful the aforesaid 4th past year. On the different hand, nett NPAs for the 4th came successful astatine 0.57 percent successful the 4th nether review, improving from 0.59 percent connected a year-on-year basis.

Operating expenses for the 4th ended March 31, 2024, accrued by 24 percent to ₹3,803 crores arsenic against ₹3,066 crore for the corresponding 4th of the erstwhile year.

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Here's what brokerages marque of the lender's Q4 results:

HSBC: The brokerage maintained a 'buy' standing for the banal with a people terms of ₹2,020, indicating a 35 percent upside. A important simplification successful the slippage ratio was a large positive, portion different metrics matched expectations. The outlook for indebtedness maturation remains strong, and the nett involvement borderline (NIM) is expected to enactment stable, supported by a favorable indebtedness premix and effectual liquidity management. Consistently beardown plus prime could pb to a re-rating of the stock, it said. The brokerage has somewhat lowered its EPS estimates by 2–3.5 percent for fiscal years 2025–27.

The EPS cuts are driven by increases successful operating expenses, it noted. "We summation our estimation for cost-to-income ratio for FY25–27 to bespeak further investments required successful branches, integer initiatives, and hiring," added HSBC.

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Emkay: The home brokerage has besides retained its ‘buy’ telephone connected the banal with a people terms of ₹2,000, implying an implicit 33 percent upside.

"IndusInd Bank (IIB) posted a flimsy (4 percent) miss connected net with ₹2350 crore PAT/1.9 percent RoA (reported), owed to immoderate moderation successful maturation (18 percent YoY), arsenic besides successful the borderline (down by 3 bps QoQ to 4.26 percent). Asset prime took a breather, with slippages down QoQ to ₹1,430 crore/1.75 percent of loans, starring to a astir unchangeable GNPA/NNPA ratio astatine 1.9 percent/0.6 percent of loans. The slope retains medium-term recognition maturation guidance astatine 18-22 percent, with a wide absorption connected diversifying its portfolio, including mortgages and non-vehicle loans. Within Vehicle loans, the slope has gradually moved distant from MHCVs and frankincense reduced cyclicality," it noted.

Emkay trimmed its net by 3 percent/7 percent for FY25E/26E, factoring successful the mean growth, portion it expects the slope to study steadfast RoA/RoE astatine 1.9-2 percent/16-17 percent implicit FY25-27E.

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Jefferies: The brokerage maintains an 'overweight' standing with a people terms of ₹1,925, indicating an implicit 28 percent upside. The company's plus prime has improved, showing beardown maturation successful retail deposits and loans. The equilibrium expanse is robust, with a Common Equity Tier 1 ratio of 15.8 percent. Gross slippages person moderated successful some firm and retail segments. The brokerage expects halfway pre-provision operating nett maturation to stay strong, projecting a 20 percent compound yearly maturation complaint (CAGR) from fiscal years 2024 to 2026. Jefferies besides trimmed its estimates by 2 percent.

Motilal Oswal: The brokerage besides has a ‘buy’ telephone connected the banal with a people terms of ₹1,850, indicating an implicit 23 percent upside.

"IIB reported an in-line performance, led by steadfast income maturation and controlled provisions. The plus prime ratios remained unchangeable and caller slippages moderated, chiefly successful the firm book. The absorption has guided for indebtedness maturation of 18-23 percent implicit FY23-26. Healthy provisioning successful the MFI portfolio and moderation successful the wide slippage tally complaint volition support recognition costs nether control. Additionally, the beingness of a contingent provisioning buffer of 0.29 percent of loans provides comfort. IIB is well-positioned to payment from margins arsenic and erstwhile the complaint rhythm turns. We estimation a 21 percent net CAGR implicit FY24-26, starring to RoE of 16.8 percent successful FY26," it stated.

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Nuvama: Nuvama has maintained a ‘buy’ telephone with a terms people of ₹1,800, indicating an upside of implicit 20 percent.

“Given IndusInd Bank’s improving plus quality, we clasp ‘BUY’. The slope does not cognize erstwhile the promoter volition summation the involvement to 26 percent. IndusInd Bank clarified that investments by its promoter holding institution successful Reliance Capital and AMC are autarkic of the slope and that the slope is not going to put successful these," said the brokerage.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decision. 

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Published: 26 Apr 2024, 01:29 PM IST