Q2FY23 Preview: IndusInd Bank: NII seen at Rs42.6 billion, PAT at Rs16.7 billion

18 Oct 2022 , 07:13 AM

Result date: 19^th October, 2022
Recommendation: Buy
Target price: Rs1,400
 
IndusInd Bank reported a heathy growth in loan book as of September 30, 2022; both sequentially as well as over the year-ago quarter. Deposits grew 4.2% sequentially and CASA ratio decreased by 80 basis points sequentially, to 42.4%. Amid healthy loan growth, the Bank’s Net Interest Income (NII) could grow 17% over the year-ago quarter and 3% sequentially. Weakness in non-interest income, though could pull down growth in total income.

The Bank’s Net Interest Margin or NIM is estimated to hold in the narrow band of 4.15-4.25% (4.21% in Q1).

Growth in Pre-Provisioning Operating Profit (PPOP) is likely to be modest owing to lower non-interest income.
Falling provisions (as compared to the year-ago quarter) could aid the Bank’s Profit After Tax (PAT) during the quarter. PAT growth is estimated at 45% over the year-ago quarter and 2% sequentially.

Important management insights to watch out for:

• Credit demand across key segments
• Asset quality trends
• Performance of Micro Finance segment
• Update on new business segment

Rs. Billion	September 2022 estimates	QoQ change	YoY change
Net Interest Income	42.6	3%	17%
Total Income	61.6	2%	12%
Pre-Provisioning Operating Profit	35.0	2%	9%
Provisions	12.5	0%	(27)%
Profit After Tax	16.7	2%	45%
Loans	2,596	5%	18%
Deposits	3,158	4%	15%

Source: Company, IIFL Research