Jefferies sees double digit increase in bank stock, buy recommendation

Private lender IndusInd Bank in its pre-quarter update posted a 19% year-over-year (YoY) net increase of $2.71,966 crore at the end of December 31, 2022 (Q3FY23). Net deposits also increased 14% year-on-year to $3,25,491 cores. Brokerage Jefferies has a ‘buy’ rating on the bank stock and a price target of $1,600.

On BSE, stocks Bank IndusInd is trading down 1.45 percent at $1222.75 each.

Jefferies The target shows a 23% gain taking into account Monday’s end of print.

“IndusInd Bank’s pre-Q3 2023 update shows a loan growth rate of 19% YoY / 5% QoQ, which we believe is led by an increase in retail loan growth (CV) and MFI) also offer higher margins.Deposit growth was slower at 14% YoY / 3% QoQ, with retail deposits and Casa deposits growing at 21%/18% YoY. I see the bank moving towards c.20% Lending Cagr & 2% ROA Attractive valuation at 1.5x 2024 adjusted PB. It’s among the top picks in this sector. . Please buy.” Jefferies said in its note.

The bank’s loan growth continued to maintain well as it increased by 4.6% QoQ and 4.9% YoY.

While deposit growth was good at 3% quarter-on-quarter and up 14.3%, the CASA mix fell 40 basis points quarter-on-quarter to 42%.

Retail deposits and deposits from small business customers amounted to Rs 1,37,968 as of December 31, 2022 against Rs. 1,29,990 cores as of September 30, 2022.

It has a market capitalization of $94,813.87 cores. IndusInd Bank reported a 60.4 percent increase in net profit year-on-year. $1786.72 cr for September quarter. Net profit for the corresponding quarter is $1113.53 billion VND.

The views and recommendations expressed above are those of individual analysts or brokerage firms, not those of Mint. We advise investors to check with certified professionals before making any investment decisions.

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