IndusInd Bank management believes that there are some risk factors in the near term as well, but they are confident about the growth in the long term.
Banking Stock to Invest: Shares of private sector bank IndusInd Bank have been looking rangebound for a few months. Talking about this year, there has been a decline of 1 percent in the stock. At the same time, it has weakened in double digits in 1 year. The stock has been under pressure after making a 1-year high of Rs 1242 in November 2021. The stock has been under pressure due to geopolitical tensions and supply chain disturbances. The bank management believes that there are some risk factors in the near term as well, but they are confident about the growth in the long term. Brokerage house ICICI Securities is also looking bullish on the stock. The brokerage has advised investment in the stock and has expected a return of 57 to 58 percent from the current price.
Credit growth target will be met!
Brokerage house ICICI Securities said that the management of IndusInd Bank (IIB) is of the view that macro uncertainties and volatility amid prevailing geopolitical tensions and prolonged supply disruptions may pose some risk to financial demand in Gems & Jewellery. In fact, Russia accounts for 30 percent of the global diamond output. At the same time, due to rising energy prices, there may also be problems in vehicle financing. However, disbursement has reached pre-covid level in most of the retail products. There is a revival in MFI disbursement. On the other hand, due to corporate loan growth, the target of 2 years for credit growth of the bank can be fulfilled. The 2-year target is 16 per cent to 18 per cent.
Credit cast expected to be normal
The brokerage house says that in the fourth quarter of FY 2022, slippages will be at a moderate level of 3.5 percent. On the other hand, it will decrease further in FY23E. Credit cost will be normal only from FY23E onwards. The brokerage believes that we expect IndusInd Bank to deliver more than 5% PPoP/loans, more than 1.8 per cent RoAs and 15 per cent RoEs by FY23E. The brokerage house has advised to invest in the bank keeping the target of Rs 1420 as before. In terms of current price of Rs 900, it can give 57 percent return.
stock performance
The stock of IndusInd Bank has fallen a little more than 1 percent this year. Whereas in 1 year this stock has weakened 13 percent. The stock has declined by Rs 340 from a 1-year high of Rs 1242 in November. Long term returns of the stock have also been negative. The stock has lost 35 per cent in 5 years.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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