IGI Logo

Result and Price Analysis

Indusind Bank (IIB) has reported a strong set of numbers with the positives being 1) 30.3% YoY jump in reported profit, led by NIMs surprise (4.29%) and lower provisioning expenses (down 21% YoY), 2) strong business growth (credit: 21.5% YoY, Deposits: 14.6% YoY), 3) Lower slippages (?13.8bn v/s ?16bn in 4QFY23) 4) Stable PCR level (PCR: 71% & Non-specific: 1% of book), 5) reduction in restructuring book to 0.66% v/s 0.84% in the previous quarter, 6) ample capital cushion (CAR: ~18%). We believe, IIB has made adequate provisioning against the potential stress from spike in MFI and CV non performing assets. However, the delinquencies from vehicles segment and credit cost in next quarters will be keenly watched. Healthy retail deposit growth towards LCR is a positive takeaway

Gazing the Core

Strong growth; looking forward for FY26 targets: The bank’s net advances stood at ~?3tn; grew 21.5% YOY and 3.9% sequentially. Corporate banking (46% of loan book) grew by 3.9% QoQ and retail (54% of book) growth at 3.9% QoQ. Vehicle loan (26% of loan book) grew by 4.1% QoQ and Micro loan (11% of loan book) witnessed de-growth of 0.7% sequentially. Vehicle financing witnessed muted disbursement (?12bn; flat QoQ). The management guidance of long term (FY23-26) credit growth of 18% - 23% CAGR is in line for this quarter. The bank’s deposits stood at ~?3.5tn and saw a healthy growth of 14.6% YOY and 3.3% QOQ; CASA ratio down by 20bps to 39.9%. The bank is holding ample liquidity (LCR: 132%). The CRAR stood at 18.4% grew from 4QFY23 with CET 1 of 16.4%. RWA to assets stood at 72%.

Slippages eased leading to GNPA reduction: The bank’s reported gross slippages inched down meaningfully to ?13.8bn against ?16bn the in previous quarter. Retail slippages contributed around 97% (?13.4bn) of total fresh GNPA additions. The slippages from restructuring book was ?1.32bn (9.6% of the total slippages). Total GNPA reduction stood at ?12.6bn v/s ?14.9bn in 4QFY23 led by higher write-offs (~?7.2bn). Owing to lower slippages and stable reduction (upgrade and recovery) GNPA ratio declined by 4bps to 1.94%.In absolute terms, GNPA up by 2% sequentially.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at www.lkpsec.com/#foo

SEBI Registration number is INM000002483

Above views are of the author and not of the website kindly read disclaimer