IndusInd Bank Shares Drop 8% in Two Sessions After Q3 Results, Brokerages Still Positive
IndusInd Bank shares declined by another 5% to trade at Rs 1,406.50 apiece on Wednesday, 15 January, after closing down 3.8% lower in the previous session. The private sector lender on Tuesday said profit grew 32% year-on-year to Rs 1,300.2 crore in the December quarter despite higher provisions.
IndusInd Bank Ltd shares have dropped over 8% in the last two trading sessions after the lender announced its financial results for the third quarter ended December (Q3). Though the bank reported healthy growth in profits, a sharp increase in gross slippages has led to a sell-off in the stock.
IndusInd Bank shares declined by another 5% to trade at Rs 1,406.50 apiece on Wednesday, i.e. 15 January, after closing down 3.8% lower in the previous session. The private sector lender on Tuesday said profit grew 32% year-on-year to Rs 1,300.2 crore in the December quarter despite higher provisions.
The bank’s net interest income also grew 34.4% year-on-year to Rs 3,074 crore, with a healthy loan growth of 20%.
However, slippages increased sharply to Rs 1,945 crore in the December quarter compared with Rs 1,102 crore in the previous quarter. There was some relief on the asset quality front, as gross non-performing assets (NPA) in Q3 fell to 2.18% of total advances from 2.19% in the previous quarter.
Net NPA also declined to 1.05% during the quarter from 1.12% in the previous quarter. Most brokerages were positive on IndusInd Bank after the lender reported its Q3 numbers. Citi gave a ‘buy’ call and also raised the target price to Rs 1,900 per share from Rs 1,800 earlier. It believes that the core operating performance remains healthy which can support higher provisions.
Macquarie also gave an ‘outperform’ call on IndusInd Bank with a target of Rs 1,850 per share, saying that the stock is cheap. It is of the view that higher slippages in corporate as well as retail are the sore points for the lender, while the good news is that the exposure to three stressed groups has declined further.
Meanwhile, Kotak Institutional Equities maintained an ‘add’ rating on the stock but cut the target to Rs 1,600 from Rs 1,650 per share. It is of the view that the recent correction in the stock price offers a positive risk-reward ratio.
Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.
Recommended For You
- Scientists Are Trying to Find Survivors of Endangered Species in Australian Bushfires
- Cat Fight: UK Couple Wins Rs 18 Lakh Court Case to Stop Neighbour from Feeding Pet Feline
- Reliance Jio Q3 2019-20 Results: Subscriber Base Jumps to 370 Million as of December 31, 2019
- Virat Kohli Spotted Driving His New Audi Q8 SUV For the First Time
- Good News For WhatsApp Users as Facebook Backs Down on Adverts, But There is a Catch