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Accumulate IndusInd Bank; target of Rs 1800: Dolat Capital

July 15
18:25 2019

Dolat Capital’s research report on IndusInd Bank

IIB (merged with Bharat Financial) reported a profit of ` 14bn (growing 38% YoY – adjusted growth of 17% YoY). The key positive was the higher NIM of the MFI book. Advance growth remained at 28% YoY, with a material contribution from retail. The advance share between wholesale and retail is now equal. The merger ensures that its regulatory allocation to PSL and sub segments and branch distribution are met. We, therefore, believe this is likely to increase the flexibility for the bank to capture more profitable growth opportunities – although, we do not expect reckless growth, ensuring a largely stable advance mix.

Outlook

We maintain our target price, as we expect upside to be capped by the warrant issue price in the near term. At 2.9x FY21E P/ABV, maintain Accumulate.

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