Shares of IndusInd Bank were trading higher on Tuesday at ₹ 1144.45 apiece, despite the resignation of its chief risk officer, after brokerages reaffirmed faith in the stock.
According to an exchange filing Ramaswamy Meyyappan, the Chief Risk Officer of the Bank tendered his resignation on May 05, 2023. He was associated with the bank since May 20, 2014, and will be moving on to lead the risk function at a multinational bank in the next phase of his career.
IndusInd Bank’s net profit rose 50 percent to ₹ 2,040 crore in the March quarter of FY23. Moreover, it declared a dividend of ₹ 14 per share for the financial year. The lender’s net interest income came in at ₹ 4,669 crores, up 17 percent from ₹ 3,985 crores in the corresponding quarter a year ago.
Morgan Stanley has an overweight rating on the stock with a target price of ₹ 1525.00. This translates to an upside of 33.25 percent as compared to its share price of ₹ 1144.45 per share. It believes that management changes in businesses are usual and this is unlikely to have a significant impact on the bank’s earnings.
Jefferies has a ‘buy’ rating on the shares with a target price of ₹ 1,550.00, which implies an upside of 35.44 percent as compared to its share price. The global investment bank sees IndusInd bank’s valuations as attractive at 1.3x FY24E.
IndusInd Bank is engaged in banking and para-banking services. It accepts deposits and grants loans to various segments such as businesses, priority sector lending as well as individuals.
Foreign Institutions hold a 42.04 percent stake in the company followed by retail investors with 17.52 percent, promoters with 16.50 percent, mutual funds with 15.63 percent and other domestic institutions with 8.31 percent.
IndusInd Bank is a large-cap bank with a market capitalization of ₹ 87,393 crores and it forms a part of the Nifty 50 index. It has a return on equity of 14.45 percent. Its shares were trading at a price-to-earnings ratio of 11.75, which is higher than the industry price-to-earnings ratio of 9.27.
Written by Simran Bafna
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