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Banks: IndusInd Bank (INBK.BO, Buy, on Conviction List)
• In our view, INBK is best placed to create value for investors buoyed by improved strength of franchise (we forecast branch network to be at
550 by FY2013E vs 210 in FY10), improving profitability and higher growth versus peers (33% earnings CAGR vs. 18%- 20% for the industry).
• We believe the re-rating will continue and over the long-term INBK could potentially surprise with better-than expected execution: (1) CASA
benefits from branch expansion (33.8% by FY2013E vs 26.8% in Dec 2010), (2) fee income rises from current low base (0.7% in FY10 vs
1.5% for HDBK), and (3) above-industry asset growth.
IndusInd Bank: More scope on high growth
> We believe INBK will deliver profit CAGR of 34% FY2010-FY2013E, with spreads up by 120 bp
> We believe this growth will be driven by (1) increasing CASA; 2) higher cross-sell resulting in increased fee income; (3) above industry loan growth; and (4) network expansion
INBK is planning to undertake significant branch expansion
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Banks: IndusInd Bank (INBK.BO, Buy, on Conviction List)
• In our view, INBK is best placed to create value for investors buoyed by improved strength of franchise (we forecast branch network to be at
550 by FY2013E vs 210 in FY10), improving profitability and higher growth versus peers (33% earnings CAGR vs. 18%- 20% for the industry).
• We believe the re-rating will continue and over the long-term INBK could potentially surprise with better-than expected execution: (1) CASA
benefits from branch expansion (33.8% by FY2013E vs 26.8% in Dec 2010), (2) fee income rises from current low base (0.7% in FY10 vs
1.5% for HDBK), and (3) above-industry asset growth.
IndusInd Bank: More scope on high growth
> We believe INBK will deliver profit CAGR of 34% FY2010-FY2013E, with spreads up by 120 bp
> We believe this growth will be driven by (1) increasing CASA; 2) higher cross-sell resulting in increased fee income; (3) above industry loan growth; and (4) network expansion
INBK is planning to undertake significant branch expansion
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