BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Research Report
Our readings of IndusInd Bank Ltd.’s FY22 annual report show the credit composition of its corporate and commercial business grew at a faster pace than the consumer finance division. We believe most of the additional credit growth in CCB was towards large corporate working capital loans (read higher cash credit composition).
The resultant margin erosion in this business was counterbalanced by the higher credit composition in unsecured credit in consumer finance division. IndusInd Bank has been moving slowly in the business banking and micro-loan segments, due to higher stress levels.
Importantly, fixed-income markets indicate a rise in credit risk spread between five years AAA-rated paper and the corresponding maturity G-Sec yield, which currently is at a three-year high. The difference between similar maturity BBB-rated paper and AAA-rated paper yields too was at all-time high in last 16 years.
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