Pick Of The Week: Edelweiss Bets On Large Cap Banking Stock After 60% PAT Growth, Buy

Edelweiss has recommended investors to buy large cap banking stock, Indusind Bank Ltd (IIB) and assigned buy call to the stock with a target price of Rs 1334 apiece.

According to analyst, "IIB delivered another strong quarter with PAT growth of 60% YoY/11% QoQ, core PPOP growth of 18% YoY/4% QoQ and a small NIM expansion of 3bp QoQ in Q2FY23. Loans grew 18% YoY/5% QoQ during the quarter." If you buy the stock at the current market price of Rs 1202, you are set to receive potential 11% return. Check details below:

1. Indusind Bank Ltd Stock Performance & Return

The last trading price of the stock is Rs 1202 after an intraday gain of 0.88%. The stock's 52-week high is Rs 1275 apiece and 52-week low is Rs 763 apiece, respectively. The stock has given return of 27% in last 1-month, 6% return in last 3-months, and 5% in last 1-month.

2. Indusind Bank Ltd Slippage Declined

Slippage declined to 2.8%, from 4.3% QoQ. Total stress loans declined to 4%, from 4.8% QoQ. PCR on total stress improved to 63%, from 60% QoQ. Credit cost fell to 1.8%, from 2.1% QoQ and has scope to decline further.

3. Indusind Bank Strategy & Key Risks

Emkay Global said, while liquidity is tightening, IndusInd has a well-rounded strategy to garner a higher share of retail deposits. The focus will be on i) gathering more deposits from NRI / wealth clients; ii) opening more branches; iii) improving digital thrust; and iv) focus on specific communities.

Risks

• Global risks could weigh on loan growth in FY24E.
• A higher than expected rise in rates may hurt NIM.
• Rise in competitive intensity.

4. About IndusInd Bank

IndusInd Bank (IIB) commenced its operations in 1994 and had transformational management change in 2008. Since management change, the bank has successfully completed three phases of planning cycle and is currently undergoing fourth phase of planning cycle.

Currently bank caters to the needs of both consumer and corporate customers. It has a robust technology platform supporting multi-channel delivery capabilities.

Disclaimer

The stock has been picked from the brokerage report of Edelweiss. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.