Buy IndusInd Bank, target Rs 1278: Reliance Securities

Reliance Securities maintains a buy rating on IndusInd Bank with a 12-month target price of Rs 1278. In the June quarter results, IndusInd net profit was led by robust growth in balance sheet along with healthy growth in NII and fee income.

The NII grew by strong 38.3 per cent YoY and 7.0 per cent QoQ to Rs13.6bn led by robust growth in advances and improvement in reported NIMs. Overall, the Bank's business growth improved as credit grew by 29.7 per cent YoY and 5.9 per cent QoQ.

"The Bank is well on the track to achieve the target set for Planning Cycle-III by consistently achieving its short-term and medium-term goals. As the Bank's total branch count is expected to reach 1,200 by FY17E-end, we believe that it is likely to sustain strong growth in CASA deposits as well as fee income," said the brokerage note.

"Stress in CV/consumer finance portfolio will also come-off due to improved operating environment. We continue to recommend buy on the stock with a revised Target Price of Rs1,278 based on 3.3x FY18 Adjusted Book Value," it said.