High slippages and exposure to select stressed accounts has marred sentiment in Indusind Bank. Uncertain credit costs post Covid pandemic a concern area

RBL Bank credit costs go up even after providing for large corporate account turning bad due to Covid related defaults
July 28, 2020
Marico poised to improve performance as growth returns to FMCG sector. Excellent track record and margin expansion through lower input costs
July 28, 2020

Indusind is a leading private sector bank with strong presence in vehicle finance and micro- finance post merger with Bharat Financial. 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 the credit costs surge due to this crisis will become evident only after moratorium is lifted. We have a neutral weight rating on the stock due to uncertainty on credit costs despte strong pre-provisioning profits – 28-07-2020 Price : Rs. 526.90 Rating: Neutral Weight Recommendation: Hold

Disclosure

Elixir Equities Private Limited (hereinafter referred to as “EEPL” ) is a registered Member of National Stock Exchange of India Limited, BSE Limited and Depository Participant of the Central Depository Services Ltd. It is also a SEBI registered Portfolio Manager. We have been granted certificate of Registration as a Research Analyst with SEBI. Registration no. is INA000004787 for the period of 5 (Five) Years from 19th May, 2017.

EEPL or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in any of the companies covered by us. However, we or our clients, relatives and associates may have an investment / trading / arbitrage / market making (informal) position of less than 1% financial interest/beneficial ownership in the companies covered by us and recommended through this portal.

We, our associates/analyst have not received any compensation from any of the companies covered by us during the past twelve months. EEPL nor its analyst has served as an officer, director or employee of any of the companies covered by us. We do provide any service to any of the companies covered by us.The views expressed herein are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.

The information and opinions in this report have been prepared by EEPL and are subject to change without any notice.

Our views and opinions are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. Nothing in this website / portal / application constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.

The securities discussed and opinions expressed may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This service may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. EEPL accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this website / portal / app.

We submit that no material disciplinary action has been taken on EEPL by any Regulatory Authority.

This website/ portal / service/ app is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject EEPL and affiliates to any registration or licensing requirement within such jurisdiction.

RATING RATIONALE

EEPL endeavours to provide objective opinions and recommendations.

We assign Buy, Hold and Sell ratings on the securities covered by us.
Our rationale for these ratings has Super, Over, Neutral and Nil Weight ratings these securities as well. These Super, Over, Neutral and Nil Weight ratings serve as a guide to the quantum / weightage of that security which may be held in your portfolio.

The ratings are for long term investing for a minimum of three years unless specified.

 

Leave a Reply

Your email address will not be published. Required fields are marked *