IndusInd Bank in focus after CLSA upgrades stock to ‘buy’, raises target price with 21% upside

Net advances of the bank for the December quarter increased 19 percent YoY while deposits increased 14 percent from last year. On a sequential basis, advances and deposits grew 5 percent and 3 percent respectively. CASA ratio stood at 42 percent from 42.2 percent YoY.

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IndusInd Bank share price was in focus on January 4 after global brokerages gave thumbs up to the stock following strong Q3 business updates.

Net advances of the bank for the December quarter increased 19 percent YoY while deposits increased 14 percent from last year. On a sequential basis, advances and deposits grew 5 percent and 3 percent respectively. CASA ratio stood at 42 percent from 42.2 percent YoY.

At 9:59am, IndusInd Bank was quoting at Rs 1,220.00, down Rs 20.75, or 1.67 percent on the BSE. It has touched an intraday high of Rs 1,273.20 and an intraday low of Rs 1,218.45.

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Global research firm CLSA has upgraded IndusInd Bank to buy from outperform and has raised target to Rs 1,500 per share, an upside of over 21 percent from current market price. CLSA believes that for Indian banks 2023 should also be a strong year especially H1 CY23, according to a CNBC-TV18 report.

“Margin would only partly normalise from H1 CY23 while large cap financials to have a lot of opex flexibility in the next 12-18 months. Overall we expect peak RoEs to sustain in FY24,” the brokerage firm said.

“Axis Bank is a preferred pick followed by ICICI Bank and State Bank of India. However, we have downgraded Bank of Baroda to outperform from buy with target at Rs 210 per share.

Jefferies has a buy call on the stock with target at Rs 1,600 per share. “Q3 update shows loan growth of 19 percent YoY and 5 percent QoQ. Uptick in retail loan growth also makes better margin while deposit growth was slower at 14 percent YoY and 3 percent QoQ. Valuations of the bank are attractive at current level,” it said.

Morgan Stanley has an overweight call on IndusInd Bnak with target at Rs 1,475 per share. The bank’s retail deposit growth accelerated to 21 percent YoY against 16 percent YoY last quarter while loan growth remained strong at 19 percent YoY as against 18 percent last quarter, the global research firm said.

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