Q4FY23 Preview: IndusInd Bank: NII seen at Rs 4,740 crore, PAT at Rs 2,031 crore

24 Apr 2023 , 07:49 AM

Result date: 24^th April, 2023

Recommendation: Buy

Target price: Rs 1,500

(Source: IIFL Research)

 

IndusInd Bank is likely to witness good performance across all key metrics in the March 2023 quarter. The bank posted loan growth of 21% as compared to the year-ago quarter and 6% sequentially. Deposits too grew at a healthy clip of 14.6% over the year-ago quarter and 3.4% sequentially. Strong business tailwinds in the MFI segment and vehicular finance portfolio are driving growth for the bank.

IndusInd Bank’s Net Interest Margin or NIM could remain stable at around 4.3%, despite rise in deposit costs. The Bank’s 1 year MCLR has increased by 165 basis points since March 2022 to 10.15%. Fixed rate loans form a large part of the Bank’s loan book, which means NIM benefits could come with a lag relative to its peers.

While credit costs are likely to moderate, all eyes will be on the flow of NPAs from the Bank’s restructured portfolio. Management expects an exit run-rate of 1.5% on credit costs.

IndusInd Bank could post 47.1% year-on-year growth in its Profit After Tax (PAT).

Important management insights to watch out for:

• Slippages from MFI and restructuring book
• Outlook on credit growth across segments
• Margin drivers amid high interest rates

Rs. Crore	March 2023 estimates	YoY change	QoQ change
Net Interest Income	4,740	21.9%	5.8%
Pre Provisioning Operating Profit	3,771	12.5%	2.4%
Profit After Tax	2,031	47.1%	3.6%

Source: Brokerage Reports