RESULTS REVIEW 2QFY17

13 OCT 2016

IndusInd Bank
BUY
INDUSTRY
CMP (as on 10 Oct 2016)
Target Price

BANKS
Rs 1,222
Rs 1,334

Nifty

8,709

Sensex

28,082

KEY STOCK DATA

Bloomberg

IIB IN

No. of Shares (mn)

596

MCap (Rs bn) / ($ mn)

728/10,944

6m avg traded value (Rs mn)

1,408

STOCK PERFORMANCE (%)

52 Week high / low

Rs 1,256/799

3M

6M

12M

Absolute (%)

10.6

23.8

29.1

Relative (%)

8.9

11.6

25.4

SHAREHOLDING PATTERN (%)

Promoters

16.7

FIs & Local MFs

13.3

FIIs

48.7

Public & Others

21.3

Source : BSE

Parul Gulati
parul.gulati@hdfcsec.com
+91-22-6639-3035
Darpin Shah
darpin.shah@hdfcsec.com
+91-22-6171-7328

Picture perfect
IndusInd Bank (IIB) continues to report strong
operating performance across parameters: (1) strong
and diversified loan growth of 26%, (2) continued
sequential uptick in margins, (3) strong CASA
accretion, (4) stable asset quality with slippages of Rs
2.6bn i.e. 1.1% ann., (5) healthy fee growth of 23%
and (6) stable C-I ratios even as bank continues to
invest into the future growth. Core and net earnings
were inline with estimates.
We believe IIBs return ratios will continue improve
led by sustained strong and diversified loan growth
(27% CAGR), stable contribution from core fees,
healthy margins (driven by changing loan mix,
improving proportion of low cost deposits, though
capital consumption will keep margins flat) and
impeccable asset quality. Maintain BUY with TP of Rs
1,334 (3.25x Sept-18 ABV of Rs 412).
Financial Summary
(Rs mn)
Net Interest Income
PPOP
PAT
EPS (Rs)
ROAE (%)
ROAA (%)
Adj. BVPS (Rs)
P/ABV (x)
P/E (x)

2QFY17
14,603
12,817
7,043
11.8

2QFY16
10,943
10,065
5,600
9.5

YoY (%)
33.4%
27.3%
25.8%
24.8%

Highlights of the quarter

Robust and diversified loan growth: The strong
loan growth at 26/6% YoY/QoQ was led in equal
measure by both corporate and consumer finance
(CFD). Among the CFD business, non vehicle
portfolio (LAP, CC, PL) continues to grow at a
relatively faster rate.
Healthy CASA, NIM uptick continues: CASA %
jumped ~210bps QoQ led by strong CA growth and
continued accretion in SA deposits. NIMs
improved 3bps QoQ to 4%, aided by 33bps drop in
CoD, despite 26bps drop in yields. We continue to
factor NIM improvement given the change in loan
mix, rising CASA proportion and decline in
interest rates.
Stable asset quality: With slippages contained at
1.1% ann., GNPA were stable at 90bps and NNPA
were stable at 37bps. Lower exposures to
stressed sectors and a mere 44bps restructured
book provide comfort on asset quality.
1QFY17 QoQ (%)
13,564
7.7%
12,338
3.9%
6,614
6.5%
11.1
6.3%

FY16
45,166
41,414
22,864
38.4
16.6
1.82
285
4.28
31.8

FY17E
56,155
50,974
29,496
49.4
15.9
1.88
327
3.74
24.7

FY18E
69,215
63,645
37,336
62.5
17.4
1.92
380
3.22
19.5

FY19E
84,844
78,365
45,582
76.4
18.2
1.89
444
2.75
16.0

Source: Bank, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters

INDUSIND BANK : RESULTS REVIEW 2QFY17

Five Quarters At A Glance

Rs mn
Net Interest Income
Non-interest Income
Treasury Income
Operating Income
Operating Expenses
Pre Provision Profits (PPoP)
Provisions And Contingencies
NPA Provisions
PBT
Provision for Tax
PAT
Balance Sheet items/ratios
Deposits
CASA Deposits
Advances
CD Ratio (%)
CAR (%)
Tier I (%)
Profitability
Yield On Advances (%)
Cost Of Deposits (%)
NIM (%)
Cost-Income Ratio (%)
Tax Rate (%)
Asset quality
Gross NPA (Rs bn)
Net NPA (Rs bn)
Gross NPAs (%)
Net NPAs (%)
Delinquency Ratio (%)
Restructuring O/s (%)
Coverage Ratio (%)

2QFY16
10,943
7,835
1,102
18,778
8,713
10,065
1,581
1,204
8,484
2,884
5,600

3QFY16
11,734
8,390
1,131
20,124
9,514
10,610
1,771
1,414
8,839
3,029
5,810

4QFY16
12,682
9,128
1,386
21,810
10,298
11,512
2,137
1,485
9,375
3,172
6,204

1QFY17
13,564
9,730
1,911
23,294
10,956
12,338
2,305
1,444
10,033
3,419
6,614

2QFY17 YoY Growth QoQ Growth

14,603
33.4%
7.7%
-0.3%
9,704
23.9%
1,449
31.4%
-24.2%
24,307
29.4%
4.4%
11,491
31.9%
4.9%
12,817
27.3%
3.9%
-7.2%
2,139
35.3%
1,517
26.0%
5.1%
10,678
25.9%
6.4%
3,635
26.0%
6.3%
7,043
25.8%
6.5%

808
281
783
96.8
16.52
15.72

864
302
822
95.1
16.43
15.64

930
327
884
95.1
15.50
14.92

1,018
350
937
92.1
15.42
14.81

1,123
410
989
88.1
15.32
14.68

38.9%
46.1%
26.4%
-875 bps
-120 bps
-104 bps

10.4%
17.1%
5.6%
-395 bps
-10 bps
-13 bps

12.35
7.37
3.88
46.4
34.0

12.07
7.15
3.91
47.3
34.3

12.04
7.06
3.94
47.2
33.8

12.07
6.93
3.97
47.0
34.1

11.86
6.60
4.00
47.3
34.0

-49 bps
-77 bps
12 bps
87 bps
5 bps

-21 bps
-33 bps
3 bps
24 bps
-4 bps

6.0
2.4
0.77
0.31
1.0
0.6
60.0

6.8
2.7
0.82
0.33
1.3
0.6
59.9

7.8
3.2
0.87
0.36
1.3
0.5
58.6

8.6
3.6
0.91
0.38
1.1
0.5
58.7

9.0
3.7
0.90
0.37
1.1
0.4
58.9

49.3%
53.3%
13 bps
6 bps
8 bps
-19 bps
-108 bps

4.5%
3.8%
-1 bps
-1 bps
-3 bps
-5 bps
24 bps

Change In Estimates
(Rs mn)

Old
NII
56,155
PPOP
50,974
PAT
29,496
Adj. BVPS (Rs)
327.5
Source: HDFC sec Inst Research

FY17E
New
56,155
50,974
29,496
326.5

FY18E
Change
0.0%
0.0%
0.0%
-0.3%

Old
69,425
63,855
37,485
381.2

New
69,215
63,645
37,336
379.8

Driven by strong loan growth and

continued NIM expansion
Fees grew 23/6% YoY/QoQ, led by IB fees
(+41% YoY & QoQ) and third-party
distribution (31/14% YoY/QoQ)
Higher LLP (Rs 1.5bn, 63bps), C/F
provisions towards sale to ARC (Rs
321mn); CFD LLP at Rs 781mn and Corp
Bank at Rs 736mn
SA grew ~37% YoY; CA grew ~28% QoQ
CASA ratio up ~210bps QoQ to 36.5%
Equally driven by both the segments; CFD
forms ~41% of the total loans
CFD yields were stable QoQ at 14.6%;
corporate yields declined ~26bps QoQ to
9.9%
NIMs were supported by lower CoF and
despite fall in C-D ratio (400bps QoQ)
Corporate slippages stood at Rs 730mn
(50bps vs. 70bps ann. QoQ) and CFD
slippages at Rs 1.9bn (1.85% vs. 1.69%
ann.)

Change
-0.3%
-0.3%
-0.4%
-0.4%

Page | 2

INDUSIND BANK : RESULTS REVIEW 2QFY17

sequential uptick in CV (3% QoQ vs. -2% in

1QFY17), 3W (+7% QoQ) and car (6% QoQ) loans

Further in line with the banks strategy the

growth in non-vehicle retail segments were

relatively higher. Non-vehicle finance growth was
across products - LAP (36%), personal loans
(~85%), credit cards (59%).

Within the Corporate segment, the key notable is

Strong Loan Growth Of ~26% YoY

With the bank having multi-product strengths,

improving outlook on the economy, and

comfortable capital positioning we estimate
loan growth to remain strong at ~27% CAGR
over FY16-FY19E.

Strong CASA momentum: CASA ratio stood at

36.5% vs. 34.4% in Q1FY17 led by both the

strong accretion in SA (36.7/7.7% YoY/QoQ) and
also gains in CA (+28% QoQ) though attributable
to on-offs.

Corporate/Retail Mix Larglely Stable QoQ

Corp.

YoY Growth (RHS)

% YoY

CFD

41

41

41

42

41

42

41

42

43

43

45

30%

47

32%
49

Rsbn

28%

51

51

53

55

57

57

58

59

58

59

58

59

59

59

2QFY14

3QFY14

4QFY14

1QFY15

2QFY15

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

24%

1QFY14

26%

22%

Source: Company, HDFC sec Inst Research

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

20%

2QFY15

1,100
1,000
900
800
700
600
500
400
300
200
100

sharp sequential pick up (13% QoQ) in the mid

corporate segment and small Business (22/8%
YoY/QoQ).

49

Advances (Rsbn)

1QFY15

Ex. Diamond and Micro

finance business, corporate/
retail mix stands at 50:50

The key notable in the CFD segment is the

4QFY14

With improving growth

outlook within the CFD book
and strong capital position,
IIB is well placed to deliver
loan CAGR of 27% over FY1619E

26/6% YoY/QoQ led by both the Corporate

(26/6% YoY/QoQ) and the CFD (27/5% YoY/QoQ)
segments.

3QFY14

CC grew ~59%, LAP grew 36%

and the PL book grew ~85%
YoY

IIBs loan growth momentum remains strong at

2QFY14

Apart from strong growth in

CV, the other non-vehicle
products showed strong
traction as well

Robust and diversified loan growth

1QFY14

Loan growth was robust at

~26% YoY equally driven by
corporate segment (+26%)
and CFD (+27%)

Source: Company, HDFC sec Inst Research

Page | 3

INDUSIND BANK : RESULTS REVIEW 2QFY17

Saving deposits/branch
improved to Rs 199mn vs. Rs
176mn YoY and Rs 190mn
QoQ
Margins were up 3bps QoQ,
supported by lower CoF and
stable yields in CFD, despite
sharp decline in C-D ratio
Overall yields declined ~20bps
QoQ to 11.9% led by 26bps
fall in corporate book. The
yields in the CFD book were
flat QoQ at 14.6%

3W

2W

Car

Equip. Fin

CASA Ratio Up 210bps QoQ To ~36.5%

CC

LAP

SA %

PL

CA %

Source: Bank, HDFC sec Inst Research

17%

17%

17%

16%

17%

16%

18%

17%

18%

19%

19%

19%

19%

18%

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

16%

17%
17%
2QFY15

17%
17%
1QFY15

16%
16%
4QFY14

16%
16%
3QFY14

16%
16%

16%

2QFY14

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

10%

14%

20%

1QFY14

30%

18%

40%

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

4QFY14

CA grew ~57/28% YoY/QoQ

due to one off balance (PSU
buy back)

UV

3QFY14

SA grew ~37% YoY (7.7%

QoQ)

CV

2QFY14

Share of CC, PL and LAP

continues to increase

CFD Mix: Non-vehicle Share Picking Up

1QFY14

CV proportion remains stable

YoY at 38.6% (of the CFD
book)

0%

Source: Bank, HDFC sec Inst Research

NIM outlook remains positive

The reported margins were up marginally by

3bps QoQ to 4%. The same is led by 16bps fall in
CoF as against 13bps fall in yield on assets. We
believe relatively lower growth in higher yield
segments as also validated by lower growth in
Risk Weighted Assets (4.7% QoQ vs. 5.6% in loan
book) have contained gains on margins.

We believe IIB is well placed to exhibit gains on

core spreads with the relatively higher share of
fixed rate loan book, pick up expected in CV
segment and continuing healthy accretion in
CASA. However, capital consumption would

result largely flat margins. We conservatively

factor in NIMs at ~4/3.9% in FY17/18E as
against 4% in FY16.

Fee growth remains healthy: Led by IB fees

(+41% YoY and QoQ each) and 31/14% YoY
growth in distribution income, IIBs core fees
grew to ~23% YoY and 6% QoQ. Fees % of
average loans at 3.4% is healthy and one of the
best in the industry. With improving NIM
trajectory and moderation in fee traction, non
interest income contribution in total income has
declined to ~40% vs. 42% QoQ and YoY each.

Page | 4

INDUSIND BANK : RESULTS REVIEW 2QFY17

47.3

47.0

47.2

47.3

46.4

47.0

48.8
3QFY15

46.3

49.2
2QFY15

3.3%
9%

44.2

3.5%

11%

45.6

44.9

46.5

47.4

3.7%

3.1%
2.9%

7%

2.7%

Source: Bank, HDFC sec Inst Research

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

1QFY15

4QFY14

3QFY14

Source: Bank, HDFC sec Inst Research

Source: Bank, HDFC sec Inst Research

3.4%

3.6%
3.4%

3.6%

3.6%
3.4%

3.6%

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

4QFY14

3QFY14

2QFY14

1QFY14

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

3.1%

3.2%

3.3%

3.4%

8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
-

3.6%

Fee Inc. % Loans (Ann.) Remains Healthy

FX Income
General fees

3.7%

Processing fees
IB Fee

3.4%

Well-diversified Fee Income Stream

Trade & Remit.
TPP distribution
Rs bn
9.0

2QFY14

1QFY14

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

4QFY14

3QFY14

2.5%

2QFY14

5%

4QFY14

Treasury gain were lower

QoQ at Rs 1.4bn vs. 1.9bn in
1Q

3.9%

13%

3QFY14

Loan processing fees degrew

~6% QoQ and Fx income
declined ~8% YoY

NIM (RHS)

Cost of Deposits

4.1%

2QFY14

Core fees grew ~23% YoY (6%

QoQ) led by IB income (+41%
YoY and QoQ) and third party
distribution income (31/14%
YoY/QoQ)

Yield on Advances

C-I Ratio: Stable QoQ

15%

1QFY14

We factor in NIMs at 3.9%

avg. over FY16-19E

NIM Strong At 4% (+12/3bps YoY/QoQ)

1QFY14

The core spreads will continue

to benefit from the rising
share of the CFD and CASA
books largely matching strong
BS growth

Source: Bank, HDFC sec Inst Research

Page | 5

INDUSIND BANK : RESULTS REVIEW 2QFY17

Asset quality impeccable

Slippages in the corporate

book were lower at Rs 730mn
vs. 940mn QoQ

IIBs asset quality continues to remain

CFD slippages inched up to Rs

1.9bn (1.85% ann. vs. 1.7%
QoQ)

Slippages stood at Rs 2.6bn (1.1% ann., flat QoQ)

SDR in 5ACs, w/w resolution

expected in 4ACs

well during the economic downturn, we

estimate the performance to remain strong
going ahead given lower exposure to stressed
sectors and small restructured book.

Asset Quality Stable Sequentially

Gross NPA
Gross NPA % (RHS)
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

0.2%

2QFY17

1QFY17

4QFY16

3QFY16

1QFY16

4QFY15

0.0%

1QFY14

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1QFY15

4QFY14

2QFY14

Source : Bank, HDFC sec Inst Research

0.4%

3QFY15

0.8%
0.8%

0.6%

2QFY15

1.1%

1.0%

0.8%

1QFY15

1.1%

1.0%

4QFY14

1.3%

1.4%
1.2%

3QFY14

1.1%

1.0%

1.3%

1.0%

1.4%

Net NPA
Net NPA % (RHS)

Rs bn

2QFY14

1.5%

1QFY14

The restructured book was

down 5bps QoQ to 44bps

The banks asset quality has held commendably

2.7%

1.2%

O/S SR stood at Rs 2.37bn

stable except for 2W (+18% QoQ) and LAP/HL/PL

(+14% QoQ).

2QFY16

Slippages Marginally Lower QoQ

NPAs in LAP book remain

comfortable at ~35-40bps
The bank sold NPAs worth
Rs ~410mn in the quarter

Segment wise GNPA in the CFD business remains

with CFD slippages at Rs 1.9bn (1.85% ann. 1.7%

QoQ) and corporate book slippages at Rs 730mn
(50bps vs. 70bps ann. QoQ).

3QFY14

GNPAs across the CFD

segment were largely stable
QoQ except for 2W (+18%
QoQ) and LAP/HL/PL (+14%
QoQ)

impeccable with GNPA of 90bps and NNPA of a

mere 37bps. Further its restructured book to
remains one of the lowest in industry at 44bps.

Source: Bank, HDFC sec Inst Research

Asset Quality Segment-wise

Corp
GNPA
Slippages
(Ann.)
LLP (Ann.)

1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
0.93% 1.09% 1.16% 1.02% 1.01% 1.00% 0.93% 0.58% 0.53% 0.54% 0.65% 0.74% 0.76% 0.73%
0.47%

0.77%

0.84%

0.54%

0.74%

0.04%

0.24%

3.27%

0.13%

0.66%

0.96%

0.85%

0.70%

0.50%

0.48%

0.42%

0.26%

0.32%

0.48%

0.19%

0.55%

0.42%

0.38%

0.63%

0.66%

0.56%

0.48%

0.52%

CFD
1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
GNPA
1.21% 1.14% 1.23% 1.25% 1.25% 1.22% 1.23% 1.15% 1.15% 1.10% 1.08% 1.08% 1.14% 1.17%
Slippages
1.50% 1.55% 2.11% 2.41% 1.66% 1.71% 2.11% 1.92% 1.64% 1.50% 1.68% 1.90% 1.69% 1.85%
(Ann.)
LLP(Ann.)
0.59% 0.67% 0.77% 0.79% 0.75% 0.69% 0.86% 0.68% 0.71% 0.65% 0.77% 0.88% 0.85% 0.79%
Source: Bank, HDFC sec Inst Research
Page | 6

INDUSIND BANK : RESULTS REVIEW 2QFY17

Consumer Finance: GNPAs

1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17
1.17% 1.08% 1.28% 1.38% 1.44% 1.50% 1.44% 1.27% 1.18% 1.10% 1.05% 1.03% 1.05% 1.03%
0.86% 0.76% 0.76% 0.87% 0.84% 0.77% 0.97% 1.08% 1.06% 1.03% 1.00% 1.22% 1.30% 1.18%
1.16% 1.17% 1.26% 1.30% 1.58% 1.59% 1.64% 1.44% 1.46% 1.57% 1.45% 1.31% 1.44% 1.45%

CV
UV
CE
3W/Small
0.83% 0.75% 0.72%
CV s
2Ws
2.87% 2.95% 2.73%
Cars
0.70% 0.44% 0.40%
LAP/PL/HL
NA
NA
NA
Cards
NA
NA
NA
Source: Bank, HDFC sec Inst Research

0.92%

0.82%

0.74%

0.90%

0.92%

1.04%

0.84%

0.81%

0.98%

1.10%

1.00%

2.50%
0.52%
NA
NA

2.49%
0.46%
0.47%
1.53%

2.42%
0.38%
0.30%
1.53%

2.36%
0.48%
0.32%
1.53%

2.53%
0.56%
0.33%
1.24%

2.65%
0.58%
0.48%
1.32%

2.83%
0.41%
0.41%
1.35%

2.95%
0.39%
0.57%
1.48%

3.06%
0.52%
0.76%
1.54%

3.20%
0.50%
0.92%
1.79%

3.74%
0.50%
1.00%
1.80%

RoAA At ~1.9% For 11 Quarters

NII

Other income

Opex

Provision

Tax

RoAA (RHS)
2.0

7.0

1.9

5.0

1.8

3.0

1.7

1.0

2QFY17

1QFY17

4QFY16

3QFY16

2QFY16

1QFY16

4QFY15

3QFY15

2QFY15

1.4

1QFY15

(5.0)

4QFY14

1.5

3QFY14

(3.0)

2QFY14

1.6

1QFY14

(1.0)

Source: Bank, HDFC sec Inst Research

Page | 7

INDUSIND BANK : RESULTS REVIEW 2QFY17

Peer Valuation
BANK
ICICIBC #
KMB
AXSB
IIB
FB
CUB
DCBB
SBIN #
BOB
Ujjivan

Mcap CMP
(Rs bn) (Rs)
1,455
1,430
1,269
727
125
84
35
1,987
374
55

250
780
531
1,222
73
140
124
256
162
461

Rating

TP
(Rs)

BUY
BUY
NEU
BUY
BUY
BUY
BUY
BUY
BUY
NEU

280
854
522
1,334
85
157
136
284
174
510

FY16
113
120
212
285
42
46
58
99
72
118

ABV (Rs)
FY17E FY18E
119
136
136
155
225
261
327
380
44
50
52
60
63
71
109
127
77
116
152
169

FY16
11.9
58.1
15.4
31.8
26.3
18.8
18.1
15.3
-6.9
26.3

P/E (x)
FY17E FY18E
10.9
8.9
36.0
28.6
15.9
13.3
24.7
19.5
18.8
14.3
16.8
14.3
20.4
16.2
13.3
9.9
18.4
10.3
20.7
23.3

P/ABV (x)
FY16 FY17E FY18E
1.76
1.63
1.38
5.54
4.75
4.02
2.50
2.37
2.03
4.28
3.74
3.22
1.75
1.65
1.46
3.06
2.67
2.31
2.14
1.96
1.73
1.97
1.83
1.52
2.25
2.10
1.40
3.92
3.03
2.73

ROAE (%)
FY16 FY17E FY18E
11.1
10.7
11.6
11.0
12.9
14.4
16.8
14.2
15.0
16.6
15.9
17.4
6.0
8.0
9.8
15.5
15.2
15.7
11.9
9.5
10.6
7.9
8.5
10.3
-14.4
5.5
9.2
18.3
17.5
12.2

ROAA (%)
FY16 FY17E FY18E
1.42
1.36
1.41
1.41
1.58
1.64
1.67
1.39
1.40
1.82
1.88
1.92
0.55
0.68
0.77
1.50
1.47
1.47
1.10
0.81
0.82
0.46
0.49
0.57
-0.78
0.29
0.47
3.65
3.65
2.15

Source: Company, HDFC sec Inst Research, # Adjusted for subsidiaries value

Page | 8

INDUSIND BANK : RESULTS REVIEW 2QFY17

Income Statement
(Rs mn)

Balance Sheet
FY15

FY16

FY17E

FY18E

FY19E

Interest Earned

96,920

115,807

145,415

181,126

226,400

SOURCES OF FUNDS

Interest Expended
Net Interest Income

62,717
34,203

70,641
45,166

89,260
56,155

111,911
69,215

141,556
84,844

Other Income
Fee Income (CEB)
Treasury Income

25,480
16,926
1,177

32,969
22,315
1,453

40,360
27,357
1,500

49,926
34,471
1,300

61,235
43,204
1,050

Total Income

59,683

78,135

96,516

119,141

146,079

Total Operating Exp

28,701

36,721

45,541

55,496

Employee Expense
PPOP

9,805
30,982

12,361
41,414

15,575
50,974

Provisions & Contingencies

Prov. For NPAs (Incl. Std Prov.)
PBT

3,891
3,389
27,092

6,722
5,015
34,693

9,155
17,937

Provision for Tax

PAT
Source: Bank, HDFC sec Inst Research,

(Rs mn)

FY15

FY16

FY17E

FY18E

FY19E

Share Capital
Reserves

5,295
101,151

5,950
171,010

5,969
196,362

5,969
228,436

5,969
267,593

Shareholders' Funds
Savings
Current

106,445
129,436
123,560

176,960
172,462
154,780

202,331
227,650
198,738

234,405
297,463
248,091

273,563
384,153
309,050

Term Deposit

488,348

602,761

771,971

986,657 1,266,171

67,714

Total Deposits

741,344

930,003 1,198,359 1,532,211 1,959,374

18,916
63,645

22,915
78,365

Borrowings
Other Liabilities

206,181
63,904

221,559
72,048

6,695
4,917
44,279

7,852
5,628
55,793

10,057
7,271
68,308

Total Liabilities

11,828

14,782

18,457

22,726

Cash & Bank Balance

107,791

101,119

22,864

29,496

37,336

45,582

Investments
G-Secs
Advances

228,783
179,061
687,882

312,143 379,935 459,609 575,576

252,680 311,573 383,053 489,844
884,193 1,127,347 1,426,093 1,804,078

Fixed Assets

11,576

256,536
79,256

292,656
87,617

357,418
97,285

1,117,874 1,400,570 1,736,481 2,146,890 2,687,640

APPLICATION OF FUNDS

Other Assets
Total Assets

12,553

118,779

13,181

146,177

13,840

184,630

14,532

81,841
90,561
97,240 101,171 108,823
1,117,874 1,400,570 1,736,481 2,146,890 2,687,640

Source: Bank, HDFC sec Inst Research,

Page | 9

INDUSIND BANK : RESULTS REVIEW 2QFY17

Key Ratios
FY15

FY16

FY17E

FY18E

VALUATION RATIOS
EPS (Rs)
Earnings Growth (%)

FY15

FY16

FY17E

FY18E

FY19E

ASSET QUALITY
Gross NPLs (Rsm)

5,629

7,768

8,623

10,137

13,319

Net NPLs (Rsm)

Gross NPLs (%)

2,105
0.8

3,218
0.9

3,478
0.8

3,737
0.7

4,768
0.7

0.3
62.6
0.5

0.4
58.6
0.6

0.3
59.7
0.5

0.3
63.1
0.4

0.3
64.2
0.5

FY19E

33.9
27.4

38.4
27.5

49.4
29.0

62.5
26.6

76.4
22.1

193.4
189.4
1.80

290.8
285.4
1.82

332.3
326.5
1.88

386.1
379.8
1.92

451.7
443.7
1.89

ROAE (%)

19.0

16.6

15.9

17.4

18.2

Net NPLs (%)

Coverage Ratio (%)
Provision/Avg. Loans (%)

P/E (x)

36.1

31.8

24.7

19.5

16.0

ROAA TREE

P/ABV (x)
P/PPOP (x)

6.45
20.9

4.28
17.5

3.74
14.3

3.22
11.5

2.75
9.3

Net Interest Income

3.44%

3.59%

3.58%

3.56%

3.51%

0.3

0.4

0.5

0.6

0.7

Non Interest Income

Treasury Income

2.56%
0.12%

2.62%
0.12%

2.57%
0.10%

2.57%
0.07%

2.53%
0.04%

Operating Cost
Provisions
Provisions for NPAs

2.89%
0.39%
0.34%

2.92%
0.53%
0.40%

2.90%
0.43%
0.31%

2.86%
0.40%
0.29%

2.80%
0.42%
0.30%

Tax

0.92%

0.94%

0.94%

0.95%

0.94%

1.80%
10.5
19.01%

1.82%
9.1
16.60%

1.88%
8.4
15.88%

1.92%
9.1
17.41%

1.89%
9.7
18.23%

BVPS (Rs)
Adj. BVPS (Rs)
ROAA (%)

Dividend Yield (%)

PROFITABILITY
Yield On Advances (%)

12.5

11.8

11.6

11.5

11.5

Yield On Investment (%)

7.1

6.6

6.5

6.4

6.4

Cost Of Funds (%)

Cost Of Deposits (%)
Core Spread (%)

7.4
7.7
4.8

6.7
6.8
4.9

6.8
6.7
5.0

6.8
6.5
5.0

6.8
6.5
5.0

NIM (%)

3.9

4.0

4.0

3.9

3.8

OPERATING EFFICIENCY
Cost/Avg. Asset Ratio (%)

ROAA
Leverage (x)
ROAE
Source: Bank, HDFC sec Inst Research,

2.9

2.9

2.9

2.9

2.8

Cost-Income Ratio (Ex. Treasury)

BALANCE SHEET STRUCTURE
Loan Growth (%)

49.1

47.9

47.9

47.1

46.7

24.8

28.5

27.5

26.5

26.5

Deposit Growth (%)

22.5

25.4

28.9

27.9

27.9

C/D Ratio (%)

Equity/Assets (%)
Equity/Advances (%)
CASA (%)
Capital Adequacy Ratio (CAR, %)
W/w Tier I CAR (%)

92.8
9.5
15.5
34.1
12.1
11.2

95.1
12.6
20.0
35.2
15.5
14.9

94.1
11.7
17.9
35.6
14.1
13.6

93.1
10.9
16.4
35.6
13.0
12.7

92.1
10.2
15.2
35.4
12.1
11.8
Page | 10

INDUSIND BANK : RESULTS REVIEW 2QFY17

RECOMMENDATION HISTORY
IndusInd

1,500

Date
10-Oct-15
13-Jan-16
22-Apr-16
8-Jul-16
12-Jul-16
13-Oct-16

TP

1,300
1,100

CMP
940
913
971
1,108
1,124
1,222

Reco
BUY
BUY
BUY
BUY
BUY
BUY

Target
1,040
1,046
1,073
1,188
1,220
1,334

900

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

700

Rating Definitions
BUY
: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL
: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 11

INDUSIND BANK : RESULTS REVIEW 2QFY17

Disclosure:
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Institutional Equities
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Board : +91-22-6171 7330 www.hdfcsec.com
Page | 12