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Home / Markets / Stock Markets /  IndusInd Bank shares trade near 52-week high post Q2 update. Should you buy?

IndusInd Bank shares trade near 52-week high post Q2 update. Should you buy?

IndusInd Bank (Photo: Company website)

  • Shares of IndusInd Bank surged more than 5% to 1,218 apiece on the BSE in Tuesday's early deals

Shares of IndusInd Bank surged more than 5% to 1,218 apiece, trading near its 52-week high level, on the BSE in Tuesday's early trading session after the bank shared its Q2 business update during which the lender's deposits grew over 15% from the year ago quarter to 3,15,824 crore.

Shares of IndusInd Bank surged more than 5% to 1,218 apiece, trading near its 52-week high level, on the BSE in Tuesday's early trading session after the bank shared its Q2 business update during which the lender's deposits grew over 15% from the year ago quarter to 3,15,824 crore.

“IndusInd Bank's 2QFY23 pre-quarter update shows loan growth of 18% YoY/ 5% QoQ, which we believe is led by uptick in retail loan growth (CVs and MFI) that also make better margins. Deposits grew by 15% YoY/ 4% QoQ, with retail deposits and Casa deposits growing at a similar pace," said global brokerage Jefferies in a note.

“IndusInd Bank's 2QFY23 pre-quarter update shows loan growth of 18% YoY/ 5% QoQ, which we believe is led by uptick in retail loan growth (CVs and MFI) that also make better margins. Deposits grew by 15% YoY/ 4% QoQ, with retail deposits and Casa deposits growing at a similar pace," said global brokerage Jefferies in a note.

Healthy growth and fall in credit costs should drive earnings turnaround at IndusInd Bank shares and valuations are attractive, it added. IndusInd Bank stays among Jefferies' top stock picks in the sector with a Buy tag and a target price of 1,330 apiece.

Healthy growth and fall in credit costs should drive earnings turnaround at IndusInd Bank shares and valuations are attractive, it added. IndusInd Bank stays among Jefferies' top stock picks in the sector with a Buy tag and a target price of 1,330 apiece.

“IndusInd Bank (IIB) continues to report a strong pickup in loan growth and we expect these trends to remain healthy which is likely to support margins. Deposit franchise too is growing strongly, with sustained focus in ramping up of Retail deposits. Improvements in asset quality, particularly in the MFI/Restructuring book, and CV demand outlook will be a key monitorable," said domestic brokerage and research firm Motilal Oswal with a Buy rating.

“IndusInd Bank (IIB) continues to report a strong pickup in loan growth and we expect these trends to remain healthy which is likely to support margins. Deposit franchise too is growing strongly, with sustained focus in ramping up of Retail deposits. Improvements in asset quality, particularly in the MFI/Restructuring book, and CV demand outlook will be a key monitorable," said domestic brokerage and research firm Motilal Oswal with a Buy rating.

The management remains focused and is making consistent progress on shoring up its Retail deposit mix. Currently, Retail/Small Business deposits constitute 41.1% of total deposits, the brokerage house highlighted.

The management remains focused and is making consistent progress on shoring up its Retail deposit mix. Currently, Retail/Small Business deposits constitute 41.1% of total deposits, the brokerage house highlighted.

Net advances picked up and grew 17.6% from the year-ago period while loan growth continued to remain healthy and grew at 4.7% QoQ. The CD ratio for the bank improved further to 82.2% (up 40bp QoQ). Its deposit growth came in strong at 4.2% QoQ, and up 14.6% YoY. Within deposits, CASA/term deposits grew 2.3%/5.7% QoQ (up 15.5%/14.1% YoY). The CASA mix thus declined by 80 bp from the previous quarter to 42.4%.

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Net advances picked up and grew 17.6% from the year-ago period while loan growth continued to remain healthy and grew at 4.7% QoQ. The CD ratio for the bank improved further to 82.2% (up 40bp QoQ). Its deposit growth came in strong at 4.2% QoQ, and up 14.6% YoY. Within deposits, CASA/term deposits grew 2.3%/5.7% QoQ (up 15.5%/14.1% YoY). The CASA mix thus declined by 80 bp from the previous quarter to 42.4%.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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