IndusInd Bank: Gearing up for the next growth phase
The performance of IndusInd Bank suggests that some of the concerns that the Street expressed on likely dip in non-interest income and sustainability of deposit base garnered in December quarter were probably a bit stretched. More importantly, the March quarter (Q4) results reiterated that the bank is in the right direction to achieve its 3-year targets, which includes doubling customer base to 20 million. Among others, it plans to expand loan book by 25-30 per cent by FY21, while improving its low-cost current account - savings accounts (CASA) deposit share to 40 per cent.Net interest income (NII) at Rs 1,667 crore expanded by 31 per cent year-on-year, while the fee income grew a tad higher at 33 per cent year-on-year to Rs 1,211 crore. This is marginally ahead of Street expectation, though provisions for loans which almost doubled in March 2017 quarter (Q4) restricted net profit growth to 21 per cent. Consequently, at Rs 752 crore, net profit was lower than Bloomberg estimate of Rs .19-04-2017