Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd
For Q1FY21, Indusind bank advance grew 4 YoY and declined 4% sequentially. Deposit grew sequentially 5%. NII grew 16% YoY, while other income declined by 9%, primarily owing to the plunge in core fees income. Contained opex helped bank to report a 13% increase in pre-provision profit. However, 5 fold jump in provision dented PAT, which plunges 64%YoY.
Moratorium loan book decline in line with peers now stands at 16%, Bank took total COVID led provision worth of Rs.1203cr, which is 0.6%. NPA sequentially decline from 0.91% to 0.86% due to an increase in the provision coverage ratio. Bank also announced that it will raise Rs3,288 crore through a preferential issue of shares to its promoter Hinduja group and other institutional investors. We expect capital raising will help the bank to improve capital adequacy ratio (CAR) and maintaining a higher CAR in uncertain times is positive. IndusInd bank trades at 1x BV of Q1FY21, which is much lower than the historical average. We believe the improvement in valuation will depend on RoE improvement.
Shares of INDUSIND BANK LTD. was last trading in BSE at Rs.526.9 as compared to the previous close of Rs. 506.4. The total number of shares traded during the day was 1051463 in over 27662 trades.
The stock hit an intraday high of Rs. 529.1 and intraday low of 511.05. The net turnover during the day was Rs. 548346452.