IndusInd Bank hits 52-week high on Q1 earnings, brokerages revise targets

IndusInd Bank shares rose 4% in early trading on July 19 to a 52-week high of 1,443.40 rupees, helped by the bank’s strong April-June earnings. . Most brokerages also welcomed the strong financial data, which helped improve investor sentiment.
As of 9:20 am, Indus India Bank was up 3.2%, trading at Rs 1,435 on the National Stock Exchange.
Private financial companies posted a net profit of Rs 2.124 billion in the April-June period, up 33% from Rs.1.631 billion in the same period last year. The final result was also consistent with CNBC-TV18’s estimate of Rs 2.127 billion. Gross income for the quarter also increased by 28% year-on-year to Rs.12,939 million, contributing to net interest income of Rs.5,863 million, up 18% from Rs.4,125 million in the previous year. NII also beat his CNBC-TV18 forecast of Rs 4,821.7 crore.
Total NPA (non-performing assets) was 1.94% (1.98% last quarter), and the bank’s asset quality remained healthy. Net NPA also fell to 0.58% from 0.59% in the previous quarter. Because earnings were strong, brokerage firms raised their price targets. Morgan Stanley, a foreign-affiliated securities company, revised its price target to 1,800 rupees while maintaining its overweight on IndusInd Bank. Morgan Stanley expects higher returns from IndusInd Bank through compounding, higher quotes and even a re-rating, as it believes the interest rate cycle has peaked. The company remains positive on stable earnings for lenders due to an improved personal deposit mix and lower borrowing costs.
Citi raised its price target to 1,630 rupees and announced a buy. The broker praised its financial stability and strong deposit growth. It’s also a plus that management is confident in its plans for a Cycle 6 strategy, which targets lending growth of 18% to 23%.
JP Morgan was next to raise its price target on Indus India Bank shares. The company rated the stock “neutral” but raised its target to 1,250 rupees, expecting deposit rates to peak in the second quarter. Domestic broker Nuvama Institutional Equities upgraded the stock to ‘buy’ with a price target of 1,620 rupees. She expects IndusInd Bank to outperform the sector with her stable NIM and steady credit growth.