Shares of IndusInd Bank slipped 6 percent today after the Reserve Bank of India (RBI) approved the re-appointment of Mr. Sumant Kathpalia as the Managing Director (MD & CEO). There is a mismatch observed with RBI approving the reappointment for a period of 2 years as against the board’s approval for 3 years.
The reappointment of Kathpalia is effective from March 24, 2023. His current term ends on March 23, 2023.
IndusInd Bank started its trading session at Rs 1,119 and is currently trading at Rs 1,072.6 showing a downside of around 4.15 percent. As compared to the previous closing price of the stock, the current levels show a downfall of approximately 6.25 percent.
Having a horizon of a year, the stock has performed well with around 18.3 percent gains to its stakeholders from Rs 907.6 to the current stock levels.
Jefferies has a ‘Buy’ recommendation on IndusInd Bank with a target price of Rs 1,550 as against the current price, showing an upside potential of around 44 percent.
IndusInd Bank Limited, incorporated in 1994 as a commercial bank under the Banking Regulation Act, 1949, is publicly held and provides a wide range of banking products and financial services to corporate and retail clients.
The Bank has built expertise in vehicle financing, micro-financing and diamond manufacturer financing and these domains contribute 43% of the loan book and have outperformed the industry during the COVID waves.
Having a quick glance at the financials, the net profit for the bank has improved on a QoQ basis which is from Rs 1,805.22 crores in Q2 v/s Rs 1,963.54 crores in Q3.
Another parameter showing a good foundation is the net NPA ratio of the bank has reduced from 0.69 percent in FY 20-21 to 0.64 percent in FY 21-22. Moreover, the CASA ratio of the
The net interest income figure for the bank has moved up QOQ from Rs 4,302 crores in Q2 v/s Rs 4,495 crores in Q3 showing an upside of around 4.5 percent. On a contrasting note, the net interest margins have reduced from 3.99 percent in FY20-21 to 3.96 percent in FY 21-22.
Digging into the profitability ratios of the bank, we can observe a positive trend. ROE shifted from 7.62 percent in FY20-21 v/s 10.57 percent in FY2-22 and the ROCE figures from 8.35 percent in FY20-21 v/s 10.33 percent in FY 21-22.
As per the latest quarter, the promoter’s shareholding in the Bank is 16.51 percent, and have pledged around 45.48 percent of it. In addition to that, the FIIs hold a 44.55 percent stake in the bank.
Written by Amit Madnani
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