IndusInd Bank’s Strong Q2FY24 Results and Positive Outlook

IndusInd Bank's Strong Q2FY24 Results and Positive Outlook

VoM News Desk | October 19, 2023 | 03:49 PM IST | Breaking News | Follow on Google News

IndusInd Bank’s Strong Q2FY24 Results and Positive Outlook

IndusInd Bank’s Strong Q2FY24 Results and Positive Outlook

After reporting its Q2FY24 earnings, IndusInd Bank, the fifth-largest private bank in India, backed by the Hinduja Group, received continued optimism from domestic brokerage firms. The bank’s shares reacted positively to the earnings announcement, surging by 3.12% to an intraday high of ₹1,464.70 per share, and were trading with gains of 2.13% at ₹1,450.60 at 11:45 AM.

Impressive Q2FY24 Performance

IndusInd Bank reported a robust performance for Q2FY24, with an 18% year-on-year (YoY) and 4% quarter-on-quarter (QoQ) increase in net interest income (NII) to ₹5,077 crore. The net interest margin stood at 4.29%, compared to 4.24% in Q2FY23 and 4.29% in Q1FY24. The bank’s pre-provision operating profit (PPOP) reached ₹3,881 crore for the quarter ending September 30, 2023, marking a 10% growth over the same period in the previous year, where it stood at ₹3,520 crore. Provisions decreased by 15% YoY to ₹974 crore. This drop in provisions, along with improved operating profit growth, resulted in a net profit of ₹2,181 crore, a 22% YoY increase compared to ₹1,787 crore in the corresponding quarter of the previous year.

Strong Asset Quality and Brokers’ Recommendations

On the asset quality front, the gross non-performing asset (NPA) ratio decreased to 1.93% in Q2FY24, down from 2.11% in Q2FY23, while the net NPA ratio was at 0.57% in Q2FY24, compared to 0.61% in Q2FY23.

Following this strong performance, domestic brokerage firms expressed their optimism:

• Sharekhan maintained its ‘buy’ call on the stock with an unchanged target price of ₹1,650, citing strong loan growth, stable NIMs (net interest margins), and lower credit costs as factors supporting return ratios and earnings trajectory.
• Kotak Institutional Equities also retained its ‘buy’ call, raising the target price to ₹1,650 from ₹1,600, emphasizing the bank’s potential for further reduction in the current discount to larger peers.
• Nuvama Institutional Equites continued with its ‘buy’ rating and set a target price of ₹1,665, highlighting healthy earnings for Q2FY24, with a positive outlook on retail slippage, deposit growth, and buffer provisions.

The bank’s consistent performance and improving asset quality are contributing to its positive market sentiment.

VoM News Desk

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