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IndusInd Bank results update

Contributed by Nirmal Bang

The Bank announced results in-line with expectation with a net interest income of Rs.510 crore and PAT of Rs.250 crore. Pre-provisioning profits came at Rs.420 crore.

Investment Rationale

- Strong growth across all parameters: The loan book grew by 31 per cent y—o-y and 6 per cent q-o-q. This was aided by a deposit growth of 24 per cent y-o-y. The growth in the core fee income continues to outpace the growth in the Balance Sheet.

- Marginal improvement in NIMs: There was a marginal improvement in NIMs at 3.25 per cent compared to 3.22 per cent during June quarter. Return ratios continued to remain strong with an RoE of 20.45 per cent.

- Expansion strategy on track: The Bank would continue to expand as per the planned phase, the target is to touch a figure of 500 branches by March 2013. The present figure stands at 441. Despite this, the Cost/Income ratio has improved to 49.4 per cent compared to 49.87 per cent during the previous quarter.

- Asset quality continues to remain steady amidst strong headwinds: The asset quality of the Bank continues to remain strong with gross NPAs at 1.03 per cent and net NPAs at 0.29 per cent. The Provision Coverage Ratio (PCR) stands at 72 per cent.