CLSA maintains 'Outperform' on IndusInd Bank, says report; shares gain 3%

IndusInd Bank shares shine: Shares of private sector lender IndusInd Bank climbed 2.74 per cent to Rs 1,421.50 on the BSE during intra-day deals on Wednesday. The bank's stock continued to trade northward as, around 1:25 PM,  IndusInd Bank shares were quoted trading at Rs 1,420.20 apiece, up 2.65 per cent from its previous close of Rs 1,383.55 on the BSE, with nearly 1.22 lakh equity shares of the bank exchanging hands, worth nearly Rs 17.16 crore.

Meanwhile, on the NSE, the bank's stock was quoted trading at Rs 1,419.70, up 2.64 per cent from its previous close of Rs 1,383.20. Nearly 41.31 lakh equity shares of IndusInd Bank exchanged hands, approximately worth Rs 582.68 crore on the NSE.

The northward move came after global brokerage firm CLSA maintained its "Outperform" rating on IndusInd Bank's stock with a target price of Rs 1,800, indicating a nearly 26 per cent upside from the current market price, as per media reports. 

The reports cited that CLSA believes it is an opportune time to re-evaluate the bank’s potential, stating that the bank is poised for growth and stability. CLSA, reports said, remains optimistic on the stable credit costs,  and potential rate cut triggers, adding that IndusInd Bank is better placed in a rate cut environment.  The asset quality of the private sector lender remains healthy with no material changes expected, CLSA analysts reportedly said.

CLSA further stated that IndusInd Bank trades at a 20-40 per cent discount to peers.
 

Meanwhile, earlier today, IndusInd Bank informed the exchanges that a penalty of Rs 0.14 crore has been imposed on the bank by the Assistant Commissioner of State Tax (Audit), Ropar (HQ), Mohali, Punjab, for various GST issues. The bank will explore filing an appeal against the order, IndusInd Bank said in the filing.

IndusInd Bank is one of the leading banking solutions providers and partners for approximately 41 million customers across the country, including individuals, large corporations, various government entities, and PSUs. The private sector lender, earlier on July 26, 2024, reported its net profit at Rs 2,171 crore, up merely 2 per cent year-on-year (Y-o-Y) in Q1FY25, due to higher provisions. On a sequential basis, IndusInd Bank's net profit was down 8 per cent from Rs 2,349 crore in Q4FY24. The private-sector lender’s net interest income (NII) jumped 11 per cent Y-o-Y to Rs 5,408 crore in Q1FY25, while other income increased 10 per cent to Rs 2,441 crore during the same period. IndusInd Bank's net interest margin – a measure of banks' profitability – was flat at 4.25 per cent in Q1.

IndusInd Bank commands a market capitalisation of Rs 1,10,585.88 crore on the BSE and is a constituent of the BSE Sensex, as of August 28, 2024.

The private sector lender has a 52-week range of Rs 1,694.35 - Rs 1,328.75 on the BSE. IndusInd Bank's shares have dropped 11.27per cent year-to-date.