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Making all the right moves
CHANGE
Initiate coverage with BUY rating and INR295 target price
IndusInd Bank has shown one of the best turnarounds, with a strong
management team and a solid execution track record. We believe the
bank will sustain its growth momentum with a focus on quality and
profitability. Its loan mix is among the best, in our view, and provides
flexibility to maintain yields in a competitive environment.
CATALYST
CV cycle pickup could drive credit growth higher
The current slowdown in the CV segment reflecting the economic
slowdown is an overhang for IndusInd Bank, as 22% of its loans are linked
directly to the CV segment. Hence, a pick-up in economic activity
resulting in an improving CV sector outlook remains a key driver for the
stock.
VALUATION
Valuations fair, recommend to investors who don’t prefer infra risk
The stock is trading at 1.9x FY13E ABV (with ROA of 1.55% over FY11-13E).
We initiate with a BUY rating and a TP of INR295. Downside risks to our
TP could arise from higher-than-expected slippages in CV and SME
segments. Premium to historical valuations should remain, given
improved business operations and low exposure to infrastructure.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Making all the right moves
CHANGE
Initiate coverage with BUY rating and INR295 target price
IndusInd Bank has shown one of the best turnarounds, with a strong
management team and a solid execution track record. We believe the
bank will sustain its growth momentum with a focus on quality and
profitability. Its loan mix is among the best, in our view, and provides
flexibility to maintain yields in a competitive environment.
CATALYST
CV cycle pickup could drive credit growth higher
The current slowdown in the CV segment reflecting the economic
slowdown is an overhang for IndusInd Bank, as 22% of its loans are linked
directly to the CV segment. Hence, a pick-up in economic activity
resulting in an improving CV sector outlook remains a key driver for the
stock.
VALUATION
Valuations fair, recommend to investors who don’t prefer infra risk
The stock is trading at 1.9x FY13E ABV (with ROA of 1.55% over FY11-13E).
We initiate with a BUY rating and a TP of INR295. Downside risks to our
TP could arise from higher-than-expected slippages in CV and SME
segments. Premium to historical valuations should remain, given
improved business operations and low exposure to infrastructure.
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