IndusInd Bank: 18-23% loan growth CAGR for FY23-26 at a PE of 14 and price to book of 2
Planning Cycle 6(PC-6) of INDUSINDBK is a roadmap with targets till FY26. Outcome against PC-6 targets as of H1-24 provides confidence in the banks ability to execute & create an upside in the stock
1. 5th Largest Private Bank
indusind.com | NSE: INDUSINDBK
2. FY19-23: 14% CAGR for Earnings per share
Growth delivered in FY23 only
3. Strong Q1-24: PAT up 30% & Revenue up 17% YoY
PAT up 4% & Revenue up 4% QoQ
4. Strong Q2-24: PAT up 22% & Revenue up 17% YoY
PAT up 4% & Revenue up 4% QoQ
5. Overall H1-24 looking strong: PAT up 26% & Revenue up 17% YoY
Total Income of ₹14,436 crores as compared to ₹12,370 crores for the corresponding previous half year
Net Profit was ₹4,326 crores as compared to ₹3,436 crores during corresponding previous half year increased by 26% YoY.
6. Strong & consistent return ratios
INDUSINDBK has grown its book sequentially year on year
7. Outlook: 18-23% loan growth CAGR for FY23-26
22% loan growth in Q1-24 followed by 21% loan growth in Q2-24 indicates that the bank is executing as per its planning cycle. The planning cycle provides a clear and strong roadmap for growth
8. Outlook 18-23% loan growth CAGR for FY23-26 at a PE of less than 14
9. So Wait and Watch
If I hold the stock then one may continue holding on to INDUSINDBK
INDUSINDBK has delivered a very strong FY23 (~100% EPS growth) and followed it up with a strong H1-24 (~26% EPS growth)
Additionally there is an outlook for strong loan growth till FY26 where INDUSINDBK is targeting 18-23% loan growth
We need to keep a very close watch on the EPS growth. We don’t want to be stuck in scenario like FY19-22 where earnings were stuck in a range
11. Or, join the ride
If I am looking to enter the stock then
We are entering INDUSINDBK where a lot of the short term performance starting from FY23 is already in the price. However the loan growth of 18-23% till FY26 is still to be discounted and provides an opportunity in the stock.
From the perspective of PE, loan growth of 18-23% till FY26 at PE of less than 14 is reasonable.
From a price to book perspective, INDUSINDBK has a net-worth of Rs 56,198 cr on a market cap of Rs 112,798.41 cr implying its available at P/B of 2 with growth till FY26 yet to be discounted.
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Disclaimer
It is an analysis of the company data and not a stock recommendation
My analysis can be completely wrong and can change the next minute based on changes in my understanding of the company
I look to own good companies at prices where there is a path to market beating returns over decades