Indusind Bank on a much stronger footing well placed to resume loan growth; Large scale provisioning has already ben done

ICICI Bank to enter new growth phase with strong loan growth and lower credit cost; value getting created in subsidiaries
August 16, 2021
Covid pandemic has severely impacted operations at M&M Finance as collection efficiencies have deteriorated
August 16, 2021

Indusind is a leading private sector bank with strong presence in vehicle and micro-finance. Exposure to IL&FS, Dewan Housing, Zee promoters and other stressed groups has soured sentiment in the stock but management has largely provided for these bad loans. Exposure to Vodafone is a risk factor on the horizon. Unfortunately, just as the Bank has provided for these large corporate accounts, Covid pandemic hit the economy and NPAs again started rising. The management decided to proactively create reserves for NPAs and recent financials suggest that most of the provisioning is already done. We have a neutral weight rating on the stock despite lower credit costs as loan book growth would be in line with peer group and valuations are attractive but track record has suffered since the ILFS crisis – 29-07-2021 Price : Rs. 991.95 Rating: Neutral Weight Recommendation: Hold

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