IndusInd Bank Q3 Results Review - NIM Movement Next Quarter Could Be Superior: Prabhudas Lilladher
IndusInd Bank saw another good quarter with core PPoP at Rs 33.5 billion led by slight beat on net interest income, fees, opex.
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Prabhudas Lilladher Report
IndusInd Bank Ltd. saw another good quarter with core pre-provision operating profit at Rs 33.5 billion (up 6% to our expectation) led by slight beat on net interest income, fees and opex.
Loan growth at ~5% QoQ was largely led by vehicle finance (up 7%), other retail (up 6%) and corporate (up 4%).
Bank expects current run-rate of vehicle disbursals to sustain in Q4 FY23E. Due to recent savings account rate hike of 150 basis points in Oct-22, net interest margin only saw a 2 bps QoQ rise to 4.6%. However, NIM in Q4 could surprise positively (our estimate: up 5bps QoQ), compared to a fall in case of peers, as 35-40% of the portfolio is fixed rate in nature, which reprices to rate hikes with a lag.
Provisions were lower due to utilisation of Rs 4.6 billion buffer provisions (now 80 bps) while one time restructuring pool decreased QoQ from 1.5% to 1.25%.
We like IndusInd Bank, although approval of Managing Director and Chief Executive Officer term by Reserve Bank of India and RTD accretion remain key monitorable.
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