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Saturday, 22 October 2016


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 



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