Indusind Bank Q1FY12 Result Update

8/6/2019 Indusind Bank Q1FY12 Result Update

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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: [email protected]

ONG TERM INVESTMENT CALL

Accumulate9 July 2011

Company Report | Q1FY12 Result Update

Q1FY12 Result Highlights

Indusind Bank (IIB) net profit grew by 52% YoY to INR 1802 Mnmainly driven by robust core fee income growth of 44% YoY. The

proportion of core fee income increased due to increase in its third

party products, trade and remittances, foreign exchange and

Investment banking income. IIB’s net interest income has grown by

32% to INR 3900 Mn as compared to INR 2957 Mn in Q1FY11 & other

income increased by 34% YoY to INR 2154 Mn.

Advances grew 31.3% YoY to INR 283.8 Bn & deposits grew by 28.7%

to INR 352.6 Bn. This was stronger than the industry’s growth rate of

~20% & ~17% respectively. Improvement in deposit mix along with

branch expansion (326 from 224 branches) led to higher CASA ratio of

28.2% in Q1FY12 (24.3% in Q1FY11). Reported NIM improved 9 bps

YoY to 3.41%, however, on sequential basis it declined 9 bps due to

sharp rise in the cost of deposits (68 bps QoQ) while yield on

advances increased by 68 bps.

IIB continued to improve its asset quality and has brought down the

net NPA level to 0.3% in Q1FY12 from 0.38% in Q1FY11. Gross NPA

ratio fell to 1.08% in Q1FY12 from 1.26% in Q1FY11, but it increasedsequentially by 7 bps and 2 bps. The NPA coverage ratio rose 288 bps

YoY to 72.9%. Also the IIB maintained a healthy capital adequacy

ratio (CAR) of 14.99% in Q1FY12 as against 13.71% in Q1FY11. The

strong traction in CAR is likely to sustain IIB’s growth momentum in

coming quarters.

Outlook & Valuation

Going forward IIB in next 3 years is planning to keep NIMs above

3.5% along with healthy bottom-line, this would be possible through

1. scaling up CASA ratio to 35% with 200 bps to 300 bps improvement

every year. 2. Bank plans to take the branch network to 550 by Mar

’13. 3. Bank is expected to expand its product suite and services to

achieve higher business growth. At the CMP, stock trades at 3x FY12E

BV, we have Accumulate rating on the stock with target price of INR

320.

Industry Banking

CMP (INR) 287Target (INR) 320

52 week High/Low (INR) 292/200

Market Cap (INR BN) 133571

3M Avg. Daily Volumes 665280

P/BV FY12E 3x

Shareholding Pattern (%)

Promoters

20%

Institutions

42%

Others

14%Non-

institutions

24%

Stock Performance

150

200

250

300

350

400

J u l

S e p

N o v

J a n

M a r

M a y

J u l

IIB NSE Nifty

Performance (%)

1 Month 3 Months 1 Year

IIB 9.4% 5.7% 31.4%

NIFTY 2.5% -2.2% 5.8%* Source: Ace, Unicon Research

(INR in mn)

Particulars Actual Estimates

NII 3900 4137

Operating Profit 3117 3282

PAT 1802 1853* Source: Company, Unicon Research

AnalystShweta Rane | [email protected]





Financials(INR in mn)

Q1 FY12 Q1 FY11 Y-o-Y Q4 FY11 Q-o-Q

Interest income 11646 7715 50.94 10488 11.04

Interest expense 7746 4759 62.77 6608 17.22

Net Interest Income 3900 2957 31.90 3881 0.50

Other Income 2154 1610 33.82 1816 18.59

Total Operating income 6054 4566 32.58 5697 6.27

Operating expenditure 2937 2260 29.93 2717 8.10

Operating Profit 3117 2306 35.17 2980 4.59

Operating Profit (%) 26.77 29.89 -312 bps 28.42 -164 bps

Provisions 446 487 -8.51 403 10.78

PBT 2671 1819 46.87 2578 3.61Tax 870 633 37.32 860 1.08

PAT 1802 1186 51.97 1718 4.88

EPS (INR.) 4662 4111 13.40 4660 0.04

NIMs 3.41 3.32 9 bps 3.5 -8 bpsSource: Company, Unicon Research *Standalone





Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

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Indusind Bank Q1FY12 Result Update