IndusInd Bank has proven a strong stance of growth and its valuation remains rationally fair.
Quarterly Earnings Results Walkthrough
IndusInd Bank has given a rally of 40 percent in the last 3 months in comparison to NIFTY which has only gained 6 percent and Bank-NIFTY which has gained 12 percent. The bank has posted strong quarterly results for Q2 FY23 which implies of a great performance of the bank in the quarter. Investors should book part profits if they are holding this stock.
IndusInd Bank posted their quarterly results on 19th October 2022. The consolidated net profit was reported at Rs 1787 crore which is an astounding 60 percent growth in comparison to the same quarter in the last year at Rs 1114 crore.
The bank achieved growth in net interest income as well as loan growth along with a sequential margin improvement with the help of a rise in lending yields post the transmission of systemic rate hikes. The improvement in overall asset quality led to a decline in provision, thereby providing a kicker for reported profit.
The Non-Performing Assets declined from Rs 2250 crore to Rs 1572 crore sequentially. The decline in the restructured book that fell from 2.1 percent to 1.5 percent of loans.
IIB has seen over 4 percent sequential and 15 percent YoY growth in deposits and has a healthy credit-to-deposit ratio of 82 percent. The CASA ratio (low-cost current & savings accounts), however, stagnated at 43 percent as the growth in current account that got a quarter-end boost from the dividend mandate of a client was offset by a poor show in savings account that felt the impact of outflow from a government account.
The growth of IndusInd Bank appears to be lagging on the chart as most of the major banks have risen past their highs which were made before the crash of 2020. The stock faces stiff resistance as the price is trying to break over the 50% retracement level. The next hurdle of 61.8% level will decide the fate of the stock whether it would truly recover and flourish or slip down. A breakout over the 61.8% retracement level will take the stock price higher, even close to its lifetime high of Rs 2038 which was made in 2018.
The stock price is above the 100-day moving average and MFI is at 69 which indicates that the stock has become expensive and investors holding the stock should ideally book profits.
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