Money making magnet IndusInd Bank share poised to give 20 per cent return in January
Management expects up to a Rs 10bn hair-cut on the total exposure to IL&FS. However, given the banks negligible stressed pipeline on the corporate side (barring IL&FS) and low risk on its vehicle-finance portfolio, we expect its asset quality to improve from first quarter of next fiscal year.
On account of 5.2 per cent growth in third quarter results of the IndusInd Bank, market outlook for the share looks bullish over the share as the company has shown such a growth defying all speculations of the market experts. The quarterly review done by Anandrathi — a leading broking firm in the equity markets — has reported that the strip is slated to touch Rs 1,914 by the end of January. Currently, the share is trading around Rs 1,600 levels. Hence, if the prediction goes right, an investor can get around 20 per cent of his or her investment in the strip in less than a month.
Taking cue from the strong quarterly results of the IndusInd Bank Yuvraj Chaudhary, Chief Financial Analyst at Anandrathi told Zee Business online in a written statement, "The loan book of IndusInd Bank grew 35 percent y/y, driven by high growth in both books, corporate (39 percent y/y) and retail (28 percent y/y). We expect mid-20s loan growth to continue in the medium term. So, our rating for the stock is buy for a target price of Rs 1,914 by the end of January."
On IL&FS crisis having its tall on the strip, Chaudhary of Anandrathi says, "The bank’s exposure to the IL&FS group is expected to slip into NPA, leading to deterioration in its asset quality next quarter.
Management expects up to a Rs 10bn hair-cut on the total exposure to IL&FS. However, given the bank’s negligible stressed pipeline on the corporate side (barring IL&FS) and low risk on its vehicle-finance portfolio, we expect its asset quality to improve from "first quarter of next fiscal year."
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Commenting upon the strong fundamentals of the bank Chaudhary adds, "The loan book grew 35 percent y/y, driven by high growth in both books, corporate (39 percent y/y) and retail (28 percent y/y).
We expect mid-20s loan growth to continue in the medium term. Management intends to focus on the retail portfolio to drive growth. Its tier-1 capital ratio of 13.8 percent suffices to support its medium-term loan-growth plans."
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