Indusind Bank Ltd. reported strong quarterly results for the quarter ending March 2015, with healthy growth in advances, net interest income, and profit after tax. Asset quality improved slightly with gross non-performing assets declining to 0.8% from 1.0% in the previous quarter. The bank expects further improvement in asset quality and margins going forward as the business mix shifts toward retail lending and CASAs increase. The analyst maintains an 'Accumulate' rating and raises the target price to Rs. 960 based on positive fundamentals and growth prospects.

1. Indusind Bank Ltd. (IIB) has delivered strong set of numbers for the quarter ended
March’15 except for marginal negative surprise on asset quality front. We attended the
analyst meet of the company and following are the key highlights of the results.
Key Highlights of Q4FY15 Results
 Healthy advances growth, higher core-fee income along with stable NIMs has led to
strong NII & PAT growth which grew by 18% YoY (7% QoQ) & 25% YoY (11% QoQ) to
Rs.9.3 bn & Rs.4.9 bn resp. Core-fee income grew by 29% YoY (~9% QoQ) with all
major sustainable streams posting double digit growth except for forex income which
was flat YoY. NIM's remained stable to 3.68% QoQ.
 Advances grew by 25% YoY (8% QoQ) majorly led by Corporate segment which grew by
33% YoY (~59% of the loan-book). Retail portfolio has shown some improvement &
grew by ~15% YoY, being one of the highest YoY growth over the last 6 quarters.
Vehicle segment has witnessed some signs of revival & management expects higher
momentum in CV segment going forward. Non-vehicle segment like LAP/CC/PL (~18%
of retail portfolio) has been witnessing strong growth with LAP growing by ~50%
YoY. Deposit grew by 23% YoY (~7% QoQ) while CASA was stable at 34.1%.
 Asset Quality improved with GNPA @ 0.8% (1.0% QoQ) & NNPA at 0.31% (0.32%) due
to sale to ARC of ~Rs.4 bn (one major account was classified as NPA after RBI declared
it as fraud account). Slippages in Q4 came in at Rs.4.5 bn being majorly attributed to
the above account (Corporate segment @ Rs.3.2 bn). However management doesn’t
foresee any major negative surprise on asset quality in the near term. Restructured
book came in flat at 0.53%. CRAR under Basel III stood at ~12.1% with ROE & ROA at
~19.8% & 1.9% resp.
 Management Guidance: 1) NIMs likely to improve going forward (Mgmt
target 3.8-4.0% in next 1 year) on back of i) Changing business mix towards retail
ii) Improving CASA iii) Benefits of fixed rate book flowing in with
declining bulk deposit rates. 2) Branch expansion to continue - added 200 branches in
FY15 to 800 & expects the total branches to reach to 1200 by FY17 end.
3) Credit Cost to be maintained at similar levels going forward (<60 bps).
4) CASA target of ~40% by FY17E.
OUTLOOK & VALUATION
Strong advances growth, healthy NIMs coupled with consistent core-fee income has led to
superior performance in the current quarter. Strong execution of well planned strategies
has helped bank achieve strong core-fee income growth along with healthy liability
franchise. Moreover, with improving economic scenario & likely change in business mix,
we expect improvement in margins & asset quality which marginally got impacted in the
current quarter. Hence, considering the sound fundamentals & strong growth prospects,
we remain positive on the stock & recommend ‘Accumulate’ with a revised price target of
Rs.960 based on our FY17E estimates.
Indusind Bank Ltd. (IIB)
April 25, 2015 ACCUMULATE MEDIUM RISK PRICE Rs.832 TARGET Rs.960
BFSI
EARLIER RECO
HOLD
Price Rs.840
Target Rs.920
Date January 21, 2015
SHARE HOLDING (%)
Promoters 15.1
FII 39.7
FI / MF 9.0
Body Corporate 12.5
Public & Others 23.7
STOCK DATA
Reuters Code
Bloomberg
Code
INBK.BO
IIB IN
BSE Code
NSE Symbol
532187
INDUSINDBK
Market
Capitalization*
Rs.440,750 mn
US$ 6952 mn
Shares
Outstanding*
529.5 mn
52 Weeks (H/L) Rs.967 / 472
Avg. Daily
Volume (6m)
912,520 Shares
Price Performance (%)
1M 3M 6M
(6) (3) 22
*On fully diluted equity shares
200 days EMA Rs.758
Please refer to important disclosures at the end of the report For private Circulation Only.
Sushil Financial Services Private Limited Member : BSEL, SEBI Regn.No. INB/F010982338 | NSEIL, SEBI Regn.No.INB/F230607435.
Regd. Office : 12, Homji Street, Fort, Mumbai 400 001. Phone: +91 22 40936000 Fax: +91 22 22665758 Email : info@sushilfinance.com
KEY FINANCIALS
Y/E
Mar.
Net Income
(Rs mn)
PAT
(Rs mn)
AEPS
(Rs)
NIM
(%)
P/E
(x)
P/ABV
(%)
ROE
(%)
ROA
(%)
FY14 28,907 14,080 26.8 3.92 31.1 5.2 16.9 1.8
FY15E 34,202 17,937 33.9 3.82 24.6 4.4 18.2 1.8
FY16E 42,553 22,780 43.0 3.86 19.3 3.7 19.6 1.9
FY17E 53,286 29,466 55.7 3.91 14.9 3.0 21.2 2.0
ANALYST
Shreyas Bhukhanwala | +91 22 4093 5096
shreyas.bhukhanwala@sushilfinance.com
SALES:
Devang Shah | +91 22 4093 6060/62
devang.shah@sushilfinance.com
Q4FY15 Result Update

2. April 25, 2015 2
Indusind Bank Ltd.
QUARTERLY STATEMENT (Rs.mn)
Y/E March Q4FY14 Q3FY15 Q4FY15
Interest Income 21,793 24,370 25,790
Interest Expense 13,981 15,756 16,538
Net Interest Income 7,812 8,614 9,251
Other Income 5,229 6,108 6,585
-Core Fee Income 4,419 5,223 5,686
Operating Income 13,041 14,721 15,836
Employee Exps. 2,079 2,555 2,654
Other Operating Exps. 3,771 4,427 4,677
Operating Profit 7,191 7,738 8,505
Provisions & Cont. 1,206 980 1,074
-NPL Provisions 726 1,057 874
PBT 5,985 6,758 7,431
Tax 2,025 2,286 2,478
PAT 3,961 4,472 4,953
(%) YoY 28.8 28.9 25.1
PROFIT & LOSS STATEMENT (Rs.mn)
Y/E March FY14 FY15E FY16E FY17E
Interest income 82,535 96,919 116,088 143,583
Interest expense 53,628 62,717 73,535 90,298
Net interest income 28,907 34,202 42,553 53,286
Other income 18,905 24,039 30,756 39,824
Total income 47,812 58,241 73,308 93,110
Operating expenses 21,853 27,259 34,243 42,955
Pre-provision Profit 25,959 30,982 39,066 50,156
Total Provision 4,676 3,891 4,551 5,511
PBT 21,283 27,091 34,515 44,645
Provision for Tax 7,203 9,155 11,735 15,179
PAT 14,080 17,937 22,780 29,466
Growth % 32.7% 27.4% 27.0% 29.4%
Y/E March FY14 FY15E FY16E FY17E
Profitability Ratios
EPS 26.8 33.9 43.0 55.7
Earnings growth (%) 32.0 26.5 27.0 29.4
CEPS 28.7 33.9 43.0 55.7
PPP / Share 49.4 58.5 73.8 94.7
ROAA (%) 1.8 1.8 1.9 2.0
ROE (%) 16.9 18.2 19.6 21.2
Dividend Payout (%) 15 14 14 13
Efficiency Ratios (%)
C-I Ratio (Excl Treasury) 46.2 46.8 46.7 46.1
Other Inc/Total Inc 38.9 41.3 42.0 42.8
Cost Asset Ratio 2.7 2.8 2.8 2.9
CASA 32.5 34.1 35.7 37.2
Business /Emp. (in mn) 74.2 71.5 73.7 76.7
Profitability / Emp. 0.90 0.90 0.95 1.02
Asset Quality Ratios (%)
Gross NPLs 1.1 0.8 0.8 0.8
Net NPLs 0.33 0.31 0.29 0.28
Coverage 70 62 65 67
Provision/ Loans 0.69 0.57 0.53 0.51
Source: Company, Sushil Finance Research Estimates
Y/E March FY14 FY15E FY16E FY17E
Asset-Liab. Profile (%)
Capital Adequacy Ratio 13.8 12.1 11.8 11.2
- Tier I CAR 12.7 11.2 11.1 10.7
C/D ratio 91 93 95 95
Loan Growth 24 25 25 25
Deposit Growth 12 23 23 25
Balance Sheet Growth 19 25 20 24
Equity / Assets 10.4 9.8 9.6 9.3
Equity / Loans 16.4 15.5 14.7 14.1
Spreads Analysis (%)
Yield on Advances 13.3 12.5 12.1 12.1
Yield on Investments 7.2 7.2 7.1 6.9
Cost of funds 7.7 7.4 7.0 7.0
Net Interest Margin 3.92 3.82 3.86 3.91
Valuation
Dividend Yield (%) 0.4 0.5 0.6 0.7
BV / Share 164 194 231 279
Adjusted BV / Share 161 190 226 274
P/E (x) 31.1 24.6 19.3 14.9
P/PPP (x) 16.8 14.2 11.3 8.8
P/ABV (x) 5.2 4.4 3.7 3.0
FINANCIAL RATIO STATEMENT

3. April 25, 2015 3
Indusind Bank Ltd.
Rating Scale
This is a guide to the rating system used by our Institutional Research Team. Our rating system
comprises of six rating categories, with a corresponding risk rating.
Risk Rating
Risk Description Predictability of Earnings / Dividends; Price Volatility
Low Risk High predictability / Low volatility
Medium Risk Moderate predictability / volatility
High Risk Low predictability / High volatility
Total Expected Return Matrix
Rating Low Risk Medium Risk High Risk
Buy Over 15 % Over 20% Over 25%
Accumulate 10 % to 15 % 15% to 20% 20% to 25%
Hold 0% to 10 % 0% to 15% 0% to 20%
Sell Negative Returns Negative Returns Negative Returns
Neutral Not Applicable Not Applicable Not Applicable
Not Rated Not Applicable Not Applicable Not Applicable
Please Note
Recommendations with “Neutral” Rating imply reversal of our earlier opinion (i.e. Book Profits / Losses).
** Indicates that the stock is illiquid With a view to combat the higher acquisition cost for illiquid stocks, we
have enhanced our return criteria for such stocks by five percentage points.
Stock Review Reports: These are Soft coverage’s on companies where Management access is difficult or Market
capitalization is below Rs. 2000 mn. Views and recommendation on such companies may not necessarily be based
on management meeting but may be based on the publicly available information and/or attending Company AGMs.
Hence Stock Reviews may be just one-time coverage’s with an occasional Update, wherever possible.
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