INDUSIND BANK (September Quarter FY17)

INDUSIND BANK reported its usual double digit growth numbers for the second quarter FY17. The bank exhibited all round growth in every segment with Net Interest Margin (NIM) touching a high of 4% in the current September quarter. NIM growth was 12 basis points YOY & 3 Basis points quarterly. As expected Net Profit, Net Interest Income, Deposits and Advances all reported double digit growth rates. Net Interest Income, difference between interest earned and expended was at Rs. 14603 Mn up by 33% YOY. Net Profit followed suit rising 26% YOY at Rs. 7043 Mn in the current September quarter. Asset quality has improved with Gross NPAs and Net NPAs at 0.90% and 0.37%, both declining 1 basis point QOQ. Provisions & contingencies too have been curtailed by 7% QOQ, though YOY rise has been 35% in the current Q2 FY17. Double digit growth rate is visible in both Corporate & Retail business segments, both growing at 38% & 22% respectively. Low cost funding or CASA ratio was another star performer for the bank galloping at 210 basis points QOQ at 36.50% in Q2 FY17, supported by current accounts rising 28% quarterly. On yearly basis, the CASA jump was 180 basis points. In absolute terms CASA rose 46% YOY at Rs. 410340 Mn. Other income which accounts 22% of total income for the bank climbed 24% YOY in Q2 FY17 and stood at Rs. 9704 Mn. Growth momentum continued for core fee with yearly growth of 23% at Rs. 8256 Mn. All components except foreign exchange income grew in double digits. Deposits grew at a higher rate of 39% compared to Advances rising at 26% YOY.

Indian economy’s strong fundamentals, favorable government policies, GST implementation is going to benefit the banking sector as a whole. INDUSIND growth story is intact and offers optimal option for value investors.  IndusInd bank with CAR of 15.32% (Tier I-14.68%), credit growth rate above industry average, growing profitability and stable asset quality is poised for high growth as one of the major players in Indian banking industry. Thus we recommend BUY for medium and long term 

   Disclaimer                                                   

                                                

    The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

    The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

   Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

  The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

    The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

  We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

  The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

   This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

   The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.