Bumper Q4 results: IndusInd Bank turns brokerages favourite - Check what Jefferies, Nomura, CLSA have to say
As IndusInd Banks Q4 profit surged over 190 per cent, brokerage firms have turned bullish on its stock and put up a Buy recommendation. In its quarter-four earnings, IndusInd Banks net profit rose over threefold at Rs 876 crore as compared to Rs 301.8 crore in Q4 FY20.
As IndusInd Bank’s Q4 profit surged over 190 per cent, brokerage firms have turned bullish on its stock and put up a Buy recommendation. In its quarter-four earnings, IndusInd Bank’s net profit rose over threefold at Rs 876 crore as compared to Rs 301.8 crore in Q4 FY20.
In this regard, Nomura has given a Buy call on IndusInd Bank, however, it sees the rising COVID-19 cases impairing the growth in some businesses. The brokerage firm says it is setting the house in order and the growth is the key unknown.
The management of the bank expects to grow commercial vehicles, microfinance institutions, and diamond financing. This is also the reason the brokerage firm has a Buy recommendation and sets a target of Rs 1,135 per share.
Similarly, Jefferies has also made a Buy recommendation on IndusInd Bank, as it sees further leg-down in credit cost that will lift RoA (return on assets) from FY22. The brokerage firm expects CASA (current and savings accounts) is also building up and management sees scope to cut rates.
Jefferies sets a target of Rs 1300 per share. It points out the CASA building up will be key to lift loan growth from just three percent quarter-on-quarter basis.
Mentioning that the current valuations are undemanding, CLSA too maintains Buy call on IndusInd Bank. It says the quarter four earnings is better than expected. The brokerage firm expects ROE (return on equity) to increase by 15 per cent by FY23/24. It sets a target of Rs 1325 per share.
The three-fold rise in the bank’s profit is mostly due to a decrease in provisions and contingencies. Which stood at Rs 1,865.69 crore, 23.5 percent lower year-on-year basis.
“We will continue to reduce our corporate book to increase granularity. We are scaling up loans to the affluent, NRI customers and SMEs,” MD & CEO, Sumant Kathpalia said in a virtual press conference post its quarterly results.
There has been a correction in the share price of bank by one and a half per cent to Rs 916 apiece, however, it has opened at day’s high in the early trade on Monday at Rs 967 per share.
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