IndusInd Bank gains 13% in 4 days ahead of Q4 result; here's what to expect

Shares of private lender IndusInd Bank erased gains and slipped over 4 per cent from day's high (Rs 959) to hit a low of Rs 917 on the BSE in the intra-day deals on Thursday. At 11:!5 AM, the stock was quoting 0.5 per cent lower at Rs 922 apiece as against a 0.2 per cent fall in the benchmark S&P BSE Sensex.

Ahead of the announcement of March quarter result, due on Friday (April 30), stock of the lender has surged 13 per cent on the BSE, compared with a 5 per cent rally in the Sensex index, in the current week.

The Street is factoring-in a solid bottom line growth, with up to 261 per cent year-on-year gain in net profit. The operating metrics may weaken and remain subdued due to lower other income.

Here's what analysts expect:

HSBC

The global brokerage is eyeing a 198 per cent YoY growth in net profit at Rs 899.5 crore for Q4FY21, up from Rs 301.8 crore reported in Q4FY20. Sequentially, however, PAT may grow just 5 per cent from Rs 852.8 crore. Operating profit, on the other hand, is seen up per cent YoY at Rs 2,980 crore from Rs 2,836.2 crore.

"Focus remains on bank's stressed exposures and potential write-offs in stressed pool. However, moderation in credit costs should drive PAT growth (off a low base)," it said.

HDFC Securities

The brokerage has an extremely bullish view on the lender's PAT and sees it swelling 261 per cent YoY to Rs 1,090 crore. The net interest income (NII) is seen rising 6.6 per cent YoY and 1.2 per cent QoQ to Rs 3,450 crore.

Kotak Institutional Equities

Analysts at the brokerage believe operating metrics may weaken amid a fall in operating profit, down 6.3 per cent YoY and 10.6 per cent QoQ, to Rs 2,657.5 crore. This would be on the back of a 3 per cent YoY growth in loan book. However, deposit growth at 27 per cent YoY may be seen as a positive development, giving comfort that the environment to mobilize deposits has improved for the bank. Net interest margin (NIM) is seen slipping 24 bps YoY and 8 bps QoQ to 4 per cent.

"We expect the bank to make higher provisions some of it contingent for the MFI book. We are building slippages of 5-7 per cent. Commentary on CV portfolio, final restructured loans book and guidance on credit costs for FY2022 would be the key monitorable," it said in a result preview report.

The brokerage is assuming provisions to fall 28 per cent on year, but rise around 12 per cent from December quartes, to Rs 1,709.3 crore. The same was Rs 2,384.2 crore in Q4FY20 and Rs 1,531.5 crore in Q3FY21. 

Motilal Oswal Financial Services

Driven by a ehalthy growth in NII at Rs 12,058.7 crore, up 36 per cent on year, the brokerage expects PAT to rise 34 per cent YoY to Rs 4,419.3 crore and operating profit 33 per cent YoY to Rs 10,774.1 crore. NII was Rs 3,231/2 crore in Q4FY20 and Rs 3,406.1 crore in Q3FY21.

Aseet quality is seen worsening sequentially with gross NPA ratio climbing to 3.5 per cent from 1.7 per cent, and NNPA ratio rising to 0.9 per cent from 0.2 per cent.

Asset quality, the brokerage says, will remain under watch, led by higher strain on the MFI business. Restructuring book to be key. Credit cost to remain elevated as the focus remains on higher PCR.