IndusInd Bank is one of the fastest growing private bank in India engaged in providing a wide range of banking products and financial services to corporate and retail clients. It is the fifth largest private bank in India promoted by the Hinduja group. The products and services offered by the bank includes microfinance, personal loans, personal and commercial vehicles loans, credit cards, SME loans. The bank is working with a widespread network of over 2,606 branches and 2,878 ATMs across country.
| Result Analysis: IndusInd Bank
(CMP: Rs.1392.60) |
Result Update: Q1FY24 |
| Stock Details | |
| Market Cap. (Cr.) | 1,08,059 |
| Equity (Cr.) | 775.95 |
| Face Value | 10 |
| 52 Wk. high/low | 1414 / 816 |
| BSE Code | 532187 |
| NSE Code | INDUSINDBK |
| Book Value (Rs) | 704.33 |
| Sector | Banks |
| Key Ratios | |
| ROE (%): | 10.57 |
| TTM EPS: | 95.93 |
| P/BV: | 2.0 |
| TTM P/E: | 14.52 |
Result Highlights:
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In Q1FY24, IndusInd bank reported a strong increase of 30.3% YoY in the consolidated net profit due to increased core income and lower provisions. Provisions declined by almost 21% YoY.
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Net Interest Income of the bank grew by 18% YoY to Rs.4,867 cr. while Net Interest Margin slightly improved by 8 bps to 4.29% on YoY basis.
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Banks’s deposits grew by 14.6% YoY and advances grew by 21.5% YoY with traction in corporate and consumer loans.
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Growth in the consumer book was widespread, particularly in the utility vehicle (up 44% YoY) and credit cards (up 39% YoY) segments. Micro Financing loans were flat sequentially, due to the cyclical nature of business and the fact that Q1 is often a difficult quarter.
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CASA deposits has grown by 6% YoY with savings account deposits at Rs.89,097 cr. and current account deposits at Rs.49,343 cr. CASA ratio of the bank declined in the quarter with 300 bps YoY to 40%.
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Asset quality of the bank has improved with Gross NPA at 1.94% Vs 1.98% QoQ and Net NPA ratio at 0.58% Vs 0.59% QoQ in the quarter. Slippages also declined on quarterly and yearly basis primarily driven by a reduction in slippages within the corporate book
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Cost to Income ratio has increased to 45.9% in Q1FY24 Vs 44.9% of Q4FY23 and 43.4 of Q1FY23.
Financial Performance:
Shareholding Pattern:
| Particulars (In %) | Q1FY24 | Q1FY23 |
| Promoters Group | 14.00 | 15.16 |
| FIIs | 52.43 | 51.69 |
| DIIs | 22.67 | 19.30 |
| Public | 7.62 | 9.92 |
| Others | 3.27 | 3.93 |
Management Commentary:
Commenting on June quarter performance, Sumant Kathpalia, Managing Director & CEO, said, The Bank began executing on its next 3-year plan (PC-6) starting Q1 focused on Growth, Granularity and Governance. The Bank maintained healthy loan growth rate of 22% YoY driven by both consumer and corporate segments. The loan growth was supported by retail deposit growth (as per LCR) of 21% YoY and overall deposit growth of 15%. The asset quality metrics too improved this quarter with lower fresh slippages and provisions YoY and QoQ. The Bank thus reported a healthy operating profit of ₹3,831 crores and net profit after tax of ₹2,124 crores growing 30% YoY. Overall, Q1 marks a healthy start to our PC-6 strategy and we remain committed to achieving our ambitions outlined in the plan.
Outlook:
IndusInd bank reported healthy results in the Q1FY24; bank’s operating performance is still on track, with limited provisions and stable NII growth as its major drivers. Fresh slippages in the corporate book are reducing QoQ, while asset quality is stable. According to management’s forecast, loan growth will increase at a rate of 18–23% from FY23 to FY26E. A decrease in credit cost will be made possible by the MFI portfolio’s healthy provisioning and the contingent provisioning buffer of 0.6% of loans, which will support earnings recovery.
Results:
| Particulars (In Rs. Cr.) | Q1FY24 | Q4FY23 | Q1FY23 | QoQ% | YoY% |
| Interest Earned | 10,730 | 10,021 | 8,182 | 7.1% | 31.1% |
| Interest Expended | 5,863 | 5,351 | 4,057 | 9.6% | 44.5% |
| Net Interest Income | 4,867 | 4,669 | 4,125 | 4.2% | 18.0% |
| Operating Profit | 3,831 | 3,758 | 3,431 | 2.0% | 11.7% |
| Provisions | 992 | 1,030 | 1,251 | -3.7% | -20.7% |
| Tax | 715 | 684 | 549 | 4.6% | 30.4% |
| Net Profit after tax | 2,125 | 2,043 | 1,631 | 4.0% | 30.3% |
| Deposits | 3,47,047 | 3,36,120 | 3,02,719 | 3.3% | 14.6% |
| Advances | 3,01,317 | 2,89,924 | 2,47,960 | 3.9% | 21.5% |
| Ratios (%) | Q1FY24 | Q4FY23 | Q1FY23 | QoQ | YoY |
| Gross NPA | 1.94 | 1.98 | 2.35 | -4 bps | -41 bps |
| Net NPA | 0.58 | 0.59 | 0.67 | -1 bps | -9 bps |
| Net Interest Margin | 4.29 | 4.28 | 4.21 | 1 bps | 8 bps |
| Capital Adequacy Ratio | 18.4 | 17.9 | 18.1 | 54 bps | 26 bps |
| Slippages (In Cr.) | 1376 | 1603 | 2250 | -227 | -874 |
| CASA Ratio | 40.0 | 40.0 | 43.0 | – | -300 bps |
Source: Company website, EWL Research
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