IndusInd Bank shares: What analysts said on stock post March quarter business update

IndusInd Bank's March quarter business update impressed analysts, as loan growth continued to improve for the private lender, with deposit growth remaining largely stable . A couple of brokerages maintaining their 'Buy' ratings on the stock post the quarterly update.  

The private lender reported a 21 per cent YoY (or 6 per cent sequential growth in net advances at Rs 2,89,965 crore compared with Rs 2,39,052 crore in the year-ago quarter. Deposit growth stood at Rs 3,36,443 crore, up 15 per cent YoY over Rs 2,93,681 crore in the year-ago quarter. CASA ratio, which indicates how much of a lender's total deposits are in current and savings accounts, dropped to 40.1 per cent from 42 per cent in December and 42.80 per cent in the year-ago quarter.

Haitong Securities said IndusInd Bank's loan growth has gradually improved over the last few quarters. The trend, it said, continued in March quarter with net

loan growth accelerating to 21.3 per cent YoY from 19.3 per cent in the March quarter. It noted that this 21 per cent-plus loan growth was higher than its estimates of 18.6 per cent for FY23E.

The aggregate deposits growth was similar to the previous quarter at 14.6 per cent against 14.3 per cent in December quarter and was slower than Haitong's FY23 estimates of 15.8 per cent.

"The relatively slower growth in CASA on sequential basis and thus dip in its share was seen in other peers (like KVB, SIB) as well. Retail customer deposits rose 3.7 per cent after 6 per cent QoQ growth in Q3, 5 per cent QoQ in Q2 and 3 per cent QoQ in Q1 to form 42.5 per cent i.e. 12 bps QoQ and 150 bps YoY," it said.

Post its business update, Morgan Stanley suggested 'overweight' rating on the stock with a target of Rs 1,525. Citi has a Buy rating with a target of Rs 1,420. Jefferies has a Buy rating on the stock with a target of Rs 1,550.

Haitong Securities said the stock trades at 1.4 times FY24 adjusted book value of Rs 762. It currently has an 'outperform' rating on the stock with target price of Rs 1,386.

Motilal Oswal said IndusInd Bank continues to report a strong trend in loan growth. It said the trend remains healthy and is likely to keep margins stable.

"Deposit franchise too is growing at a steady pace, with sustained focus on ramping up of Retail deposits. Improvements in asset quality, particularly in the MFI/Restructuring book, and CV demand outlook will be the key monitorables.

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