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IndusInd Bank
IndusInd Bank reported loan book growth of 31% yoy to `25,001cr driven by consumer
loan and corporate loan segment. However deposit grew slower than loan book posting
growth of 25% yoy to `30,663cr. Net interest income rose 53% yoy to Rs 363cr led by robust
loan book growth and increase in NIMs. IndusInd Bank reported strong NIMs of
3.61% in 3QFY2011 from 2.94% in 3QFY2010. CASA ratio improved to 26.8% in Q3
FY11 from 25.1% in Q2 FY11 and 22.54% in Q3 FY10. NIMs expected to be around
~3.4% for FY11 and ~3.2%FY12E.
Restructuring to Expansion phase–Delivering the promise:
IndusInd Bank with the initiatives of the new management has successfully restructured its
operation.
Phase I: Restructuring focused on the three motherhoods: Profitability, Productivity and
Efficiency. The bank has shown a remarkable improvement in all the parameters NIM, RoA,
RoE, CASA and Cost to Income ratio.
Phase II: IndusInd Bank aims to continue the focus on Productivity and Efficiency, resulting
in Profitability along with the branch network expansion scaling up the footprint and brand
building.
Liability management and Branch expansion to boost low cost deposits and
NIMs: IndusInd Bank’s dependency over high cost bulk deposits has reduced/been
replaced by low cost deposit base–CASA. The management plans to add over 100
branches in FY2011E and the branch network of 700 branches by FY2013E will further
support the CASA growth. The increasing low cost deposit base will improvise NIMs to the
tune of ~3.5%.
Improving Asset Quality and Provision coverage: IndusInd Bank has consistently
been improving its asset quality profile with aggressive recovery mechanisms and write-offs.
The bank has managed to reduce Gross NPA to ~1.21% in 3QFY2011 and Net NPA of
0.4%.
Valuation: At the current market price of `257, IndusInd Bank is trading at P/BV of 3.7x
on FY2011E ABV of `65 and P/BV of 3.0x on FY2012E ABV of `81.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IndusInd Bank
IndusInd Bank reported loan book growth of 31% yoy to `25,001cr driven by consumer
loan and corporate loan segment. However deposit grew slower than loan book posting
growth of 25% yoy to `30,663cr. Net interest income rose 53% yoy to Rs 363cr led by robust
loan book growth and increase in NIMs. IndusInd Bank reported strong NIMs of
3.61% in 3QFY2011 from 2.94% in 3QFY2010. CASA ratio improved to 26.8% in Q3
FY11 from 25.1% in Q2 FY11 and 22.54% in Q3 FY10. NIMs expected to be around
~3.4% for FY11 and ~3.2%FY12E.
Restructuring to Expansion phase–Delivering the promise:
IndusInd Bank with the initiatives of the new management has successfully restructured its
operation.
Phase I: Restructuring focused on the three motherhoods: Profitability, Productivity and
Efficiency. The bank has shown a remarkable improvement in all the parameters NIM, RoA,
RoE, CASA and Cost to Income ratio.
Phase II: IndusInd Bank aims to continue the focus on Productivity and Efficiency, resulting
in Profitability along with the branch network expansion scaling up the footprint and brand
building.
NIMs: IndusInd Bank’s dependency over high cost bulk deposits has reduced/been
replaced by low cost deposit base–CASA. The management plans to add over 100
branches in FY2011E and the branch network of 700 branches by FY2013E will further
support the CASA growth. The increasing low cost deposit base will improvise NIMs to the
tune of ~3.5%.
Improving Asset Quality and Provision coverage: IndusInd Bank has consistently
been improving its asset quality profile with aggressive recovery mechanisms and write-offs.
The bank has managed to reduce Gross NPA to ~1.21% in 3QFY2011 and Net NPA of
0.4%.
Valuation: At the current market price of `257, IndusInd Bank is trading at P/BV of 3.7x
on FY2011E ABV of `65 and P/BV of 3.0x on FY2012E ABV of `81.
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