lnduslnd Bank Ltd. - Q3 FY23 Earning Highlights | Globe Capital
18-Jan-2023
lnduslnd Bank Ltd. – Q3 FY23 Earning Highlights

Robust Balance Sheet with Strong Capital Adequacy & Contingency Buffers

Q3 FY23 Earning Overview and Verdict
CMP
Rs. 1222
Verdict
Beat the market estimates

Earning Highlights Q3FY23:

  • Net Interest Income (NII) grew by 18% YoY to ₹4,495 crores from ₹3,793 crores.
  • Net Profit for the quarter ended December 31, 2022 was ₹1,964 crores as compared to ₹1,242 crores during corresponding quarter of previous year up by 58% YoY.
  • Other income at ₹2,077 crores for the quarter ended December 31,2022 as against ₹1,877 crores for the corresponding quarter of previous year, grew by 11% YoY. Core Fee grew by 28% YoY to ₹1,941 crores as against ₹1,519 crores for the corresponding quarter of previous year.
  • NIM improved to 4.27% as compared to 4.10% for Q3 FY22 and 4.24% for Q2 FY23.
  • Deposits grew by 14% YoY to ₹3,25,278 crores from ₹2,84,484 crores; CASA grew by 14% YoY.
  • Gross NPA and Net NPA ratios improved to 2.06% and 0.62% from 2.48% and 0.71% YoY respectively and PCR at 71% as at December 31, 2022.
  • Net worth crosses ₹50,000 crores mark, scaled up to ₹50,686 crores at Q3 FY23.
  • Annualised Earning per share at ₹101 per share.
  • Capital Adequacy Ratio (CRAR) at 18.01% CASA at 42% and Liquidity Coverage Ratio at 117% underscore the strength of operating performance of the Bank and adequacy of capital.
  • Bank’s Networks: As of December 31, 2022, the Bank’s distribution network included 2384 branches/ Banking outlets and 2894 onsite and offsite ATMs, as against 2103 Branches/ Banking outlets and 2861 onsite and offsite ATMs as of December 31, 2021. The client base stood at 33 million as on December 31, 2022.
  • Balance Sheet: Balance sheet footage as on December 31, 2022 was ₹4,44,485 crores as against ₹3,90,564 crores as on December 31, 2021, showing growth of 14%.

Deposits as on December 31, 2022 were ₹3,25,278 crores as against ₹2,84,484 crores, an increase of 14% over December 31, 2021. CASA deposits increased to ₹1,36,379 crores with Current Account deposits at ₹50,007 crores and Savings Account deposits at ₹86,372 crores. CASA deposits comprised 42% of total deposits as at December 31, 2022.

Advances as of December 31, 2022 were ₹2,72,754 crores as against ₹2,28,583 crores, an increase of 19% over December 31, 2021.

Management Takeaways:

As per the management, Indian economy continues to be a bright spot in the world even though the external macros are challenging. With strong fundamentals, the Indian banking sector has been resilient and continues to aid in the economic recovery. IndusInd Bank too continued its growth momentum across metrics. Bank’s loan growth was at 19% YoY with all segments contributing to the growth. GNPA was lower at 2.06% and NNPAs range bound at 0.62% with a healthy PCR of 71%. Bank’s Core Operating Profit grew by 11% YoY bolstered by better NIMs and healthy client fees. The Bank remains on track to achieve its strategic ambitions and having financial metrics in the top quartile of the industry.

Valuation & View:

At the CMP of Rs. 1222, the stock is trading at P/BV multiple of 1.86 times with the Book Value of Rs. 653, which is fairly valued.

Disclosure

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