HDFC Securities maintains buy on IndusInd Bank, target price Rs 1904

HDFC Securities has maintained a buy rating on IndusInd Bank in the long term with a target price of Rs 1904. Shares of IndusInd Bank gained 2.23% to Rs 1250.50 on Monday while the BSE Sensex closed 87.39 points up at 38,214.47.

Company Financials

The bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs 4370.20 crore and Net Non Performing Assets (Net NPAs) of Rs 2202.57 crore ). For the quarter ended 30-09-2019, the company has reported consolidated interest income of Rs 5948.67 crore, up 3.39% from last quarter interest income of Rs 5753.84 crore and up 33.61% from last year same quarter interest income of Rs 4452.10 crore. The bank has reported net profit after tax of Rs 1400.95 crore in the latest quarter.


Investment Rationale

Earnings estimates fall by 6% over FY20-22E, with slower growth, higher NPAs and credit costs. Significant slips on asset quality, broader macro stress and the upcoming leadership change preclude lofty valuations, said the brokerage. With its top-drawer private banking franchise is intact, the brokerage believes the bank can pull back from this slip.