Indusind Bank to ride on loan growth; brokerages bullish on stock, recommend buy

Investors could earn nearly Rs 360 per share on IndusInd Bank, according to brokerage firm Jefferies. The global brokerage firm said that has IndusInd Bank shares can climb to Rs 1,600 apiece - highest among its other peers. The stock was recommended at a price of Rs 1,241. The optimism rides on strong loan growth recorded by the private lender.  

There is a 19 per cent year-on-year growth in credit on uptick in retail loan off-take, the brokerage noted. Sequentially, the growth is 5 per cent. According to estimates, loan growth CAGR is expected to be around 20 per cent with Returns on Assets (RoA) at 2 per cent. Jefferies said that the valuations are attractive at 1.5 times FY24 adjusted PB (Price-to-Book value).  

Meanwhile, CLSA has raised its price on IndusInd Bank shares to Rs 1,500 from Rs 1,400, recommending an accumulate rating. Another brokerage firm, Morgan Stanley is ‘Overweight’ while putting the target at Rs 1475. Macquarie has put a more conservative target at Rs 1400. 

The upside for this stock estimated by these brokerages is between 12 and 29 per cent. 

The stock was trading at 1,225.65 on the NSE, down by Rs 15.30 or 1.23 per cent from Tuesday closing price. The counter had touched 52-week low of Rs 763 on 23 June 2022. It shot up to 1,275.80 within 3 months from the low, giving returns of over 40 per cent or Rs 512 per share.

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Intraday Movement    

Source: NSE

It has outperformed the broader market Nifty50 by 31 per cent over 1-year period as against 3 per cent returns given by the latter, according to data sourced from Trendlyne. The stock is available at a price-to-book value of 1.99.  

Price Movement 

Source: NSE

The stock is highly volatile and is trading at a 1-year beta of 1.4. Momentum indicators RSI and MFI are at 59.4 and 55.6. A number below 20 indicates that the stock is in oversold territory while a number above 70 indicates that the stock is overbought. 

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)