Q2 Results: Here’s What Brokerages Have To Say On IndusInd Bank
Net profit of the bank—which is fresh off its merger with Bharat Financial Inclusion Ltd.—met analyst estimates in the quarter.
Here’s what brokerage have to say about IndusInd Bank’s second-quarter results:
- Cut target to Rs 1,793 from Rs 2,060.
- Q2 saw growth moderation and higher slippages outside the stressed pool.
- Business momentum was soft with growth being much lower than historical trend.
- Asset quality reasonably steady while few accounts portend challenges.
- Cut target as multiple comes down to 2.7x price-to-book from earlier 3.1x.
- Maintain Neutral, Target Rs 1,474
- Slower loan growth was offset by better margins in softening interest rate environment
- Accelerated provisioning to improve provision coverage to 50 percent is a prudent move
- Weaker PCR, continued slowdown, management change uncertainity should limit rerating
- Maintain ‘Overweight’; Target Rs 2,000.
- Earnings miss was driven mainly by lower pre-provision operating profit and higher provisions
- PPoP miss mainly driven by slower loan growth and higher operational expenditure.
- Cut target to Rs 1,500 from Rs 1,800; Maintain ‘Buy’
- Net interest income was below expectations on account of lower credit growth but net interest margin remained stable.
- Higher slippages in consumer book were on account of microfinance business.
- Exposure on stress corporate to continue to act as deterrent for peak valuations.
- The market signal reflects “we don’t rate you quality anymore”.
- Management remained unruffled and confident on recovery prospects.
- Market is giving a signal to the management: Don’t tell us, all is well.
- Doesn’t deserve a quality valuation multiple, when the quality perception has not held out.
- Credit cost doesn’t inspire confidence when the CEO is in the last six months of his tenure.