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Shares of IndusInd Bank plunged nearly 4% to ₹1,178 apiece on the BSE in Thursday’s opening deals after the private sector lender reported a net profit of ₹1,787 crore in the June-September quarter, up 60% from the same period last year, on the back of higher income and lower provisions.
“For Q2 FY23, IndusInd Bank’s profit of up 60% YoY was tad ahead with better NII and lower provisions. Moderation in delinquencies and pick-up in retail growth that helped to sustain NIMs despite rise in funding costs were positives. We see more headroom from growth in MFI & business banking segments. Savings deposit dipped 6% QoQ due to drag from Govt. linked A/Cs; granularisation is key. We raise estimates by 2-5% and hold IIB among our top sector picks,” said global brokerage Jefferies while maintaining its Buy tag on IndusInd Bank shares with a target price of ₹1,530 (from ₹1,330 earlier).
The bank’s total provisions during the period stood at ₹1,141 crore, down 33% from a year earlier. The lender also reported a net interest income (NII), difference between interest earned and expended, of ₹4,302 crore in Q2, up 18%. Its net interest margin (NIM), a key measure of profitability, touched 4.2%, higher than the preceding quarter.
“The strong growth trajectory, coupled with slight margin uptick and meaningful reduction in GNPA ratio is what we like. We believe the recent board approval of the MD’s term extension by 3 years is positive amid investor concerns about the MD likely not seeking a term extension. RBI approval too is keenly awaited, but we reckon it may not be a major hurdle,” said brokerage Emkay. It has retained its Buy tag on the bank stock with revised target price of ₹1,500 (earlier ₹1,275).
Indian lenders are expected to report strong numbers for the second quarter as lending picked up even amid a slew of central bank rate hikes. Last week, top private lender HDFC Bank reported a 20% jump in profit.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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(This story has not been checked by Kashmir Bulletin and is auto-generated from other sources)
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