IndusInd Bank is one of the fastest growing private sector banks with over +400 branches, 796 ATMs and
two international locations at London and Dubai. The bank was incorporated in April 1994 and Hinduja
group was the founding promoters. With a new management team led by Mr. Romesh Sobti from ABN
ARMO in 2008, the bank has turned around significantly in the last four years.
The bank has posted a top line growth of more than 25% and a profit growth of more than 30% during
the first half of the current financial year. On the operational front, its asset quality is one of the best
in the industry with its NPAs at 0.29% on September 2012. The bank’s capitalisation is above the RBI’s
levels; however, it is planning to raise capital through equity in the coming quarters to make it more
comfortable.
In absolute terms, gross non-performing assets (GNPAs) grew 12% quarter on quarter (QoQ) to Rs410
crore, while in percentage terms, GNPAs and net non-performing assets remained flat QoQ at 1% and
0.3%, one of the best in Industry. In absolute terms, the slippages were flat . On the valuation front, at
CMP of Rs366, the stock is trading at 3.2 x FY13 and 2.6x FY2014 P/BV. By looking at healthy NIM
growth and assets quality, we believe the current valuation is attractive.
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