IndusInd Bank Up 10% After Morgan Stanley Raises Target By 14%

On Wednesday, shares of IndusInd Bank soared 10% to hit an intraday high of Rs 1,080.80 apiece on BSE after global brokerage Morgan Stanley raised the target price on the stock by 14%.

"We value IndusInd using a base-case price to adjusted book value valuation methodology (vs. probability-weighted price to adjusted book value valuation methodology previously). We have revised our price target from Rs 1,075 to Rs 1,225," analysts at Morgan Stanley in a report.

The brokerage said in its report that in a bullish scenario, it sees the stock rising to Rs 2,030 levels in the next one-year, while pegging the stock at Rs 550, in a bearish scenario.

Recently, on 29 January, the lender had reported a 37% drop in net profit to Rs 830 crore in the third quarter ended December 2020 as provisions and contingencies swelled 78% year-on-year to Rs 1,854 crore from Rs 1,044 crore set aside last year.

Also, the bank said pursuant to an order by the Supreme Court, no new non-performing asset (NPA) was recognised since 1 September 2020. "If such NPAs were recognised, the pro forma gross NPA would have been at 2.93% and the pro forma net NPA, after considering provisions allocated, would have been 0.70%," it said.