IndusInd Bank Value Research

1. MOTILAL OSWAL
Think Equity Think QGLP Contest 2018
Application Form
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2. IndusInd Bank

3. 3
Brief company background
IndusInd bank was incorporated in 1994 with Current customer base of ~11 million and Total
Assets of over Rs 2,200 bn
One of the Leading private sector bank and financial services company in India
Pan India presence through a network of 1,400 branches and 2,203 ATMs
Diversified loan book – Split between Corporate & Commercial Banking and Consumer Finance
at 54% and 46% respectively
Market Cap of over INR 1,140bn implying trailing P/E multiple of 30x and P/B multiple of 4.9x
Recently announced acquisition of Bharat Financial Inclusion Limited (BFIL), a leading
Microfinance Non Bank Finance company
The bank offers commercial, transactional and electronic banking products and services

4. QGLP Analysis

5. 5
Longevity – of both Q & GPrice
QGLP in a nutshell
• IIB’s Focus on India’s 19% unbanked population for growth
ensure longevity of growth
• Competitive Advantage – Lowest Cost to Income ratio, well
diversified Revenue streams
• Huge Rural Opportunity – 3x Current Market
• Effective Risk Management – ensures Quality
• Focus on Sustainable Banking
• Current P/E 30.93x and P/B 4.75x
• FY21 P/E 15.02x and P/B 2.89x
• Robust 25.95% return CAGR
QGLP
“QGLP – Quality, Growth, Longevity, reasonable Price”
Quality of business x Quality of management
• Massive value migration from state-owned banks to private banks
Point 2
• Higher CASA Ratio than market and increasing at a rate of 6.3%
• IBL’s GNPA (1.18%) and NNPA (0.51%) lowest amongst industry
• Competent Management with growth mindset
• Steady Growth in terms of ROTA and ROE
Growth in earnings
• Loan mix shifting towards higher yielding CFD
• Merger with BFIL ->Huge increase in outreach with ~1,400 well-
spread MFI outlets with 6.8 Mn borrowers
• Expect FY18-21 EPS CAGR of 27.24%
• IBL’s banking capabilities + BFIL’s large presence in Under Banked
Areas
• Vision Cycle (FY17-FY20): Loans Growth of 25-30% CAGR

6. 6
Q – Quality
0.606
0.555
0.458 0.421 0.397 0.361 0.329
0.278 0.318
0.417 0.435
0.497 0.524
0.569
0.116 0.127 0.125 0.144 0.106 0.115 0.102
0
0.2
0.4
0.6
0.8
2012 2013 2014 2015 2016 2017 2018
PAT market Share
PBS PSBs Foreign Banks
0.56 0.51 0.5 0.49
0.36 0.29 0.26
0.44 0.49 0.5 0.51
0.64 0.71 0.74
0
0.2
0.4
0.6
0.8
1
1.2
2012 2013 2014 2015 2016 2017 2018
Market Share PBs vs PSBs
Private Banks #REF!
1317000 1298000 1332000
1456000 1476000
1603000
1715000
2012 2013 2014 2015 2016 2017 2018
Growth in Deposits
5.46%
6.39%
7.41% 8.16%
7.11% 6.74% 7.36%
2.51% 2.62% 2.86% 2.86% 2.51% 3.15% 3.90%
2012 2013 2014 2015 2016 2017 2018
Indias GDP growth rate vs World GDP
growthrate
India GDP growth Rate World GDP groeth rate
11.20%
13.00%
10.70% 10.70%
13.00%
11.00%
15.70%
0.00%
5.00%
10.00%
15.00%
20.00%
2012 2013 2014 2015 2016 2017 2018
Money Spply Growth With the increase in money
supply, people’s focus shifting
to:
• More Savings ( Deposit will
increase)
• Taking more loans from
banks for personal
investment
Leading to More Consumer
Facing Business
Deposits in banks of India are growing at a
CAGR of around 11.7%. But after 2012
people are more focusing on Private sector
banks as:
Public Sector banks are unable to match
customer friendly interface
Public Sector banks are unable to match
customer friendly interface
Changing technology like e-wallets, mobile banking etc. and customer education
PSBs have accumulated an unsustainable level of NPAs, resulting in extremely low
capitalization ratios (CET-1)
PBs focused on strong branch expansion (without much dent on profitability) and
diversification, having strong retail customer base
Catalyst for value migration from public to private sector banks
Overview of value migration
Private sector banks (PBs) have gained 17-18% market
share in loans and deposits from public sector banks
(PSBs) in the past two decades
Focus on profitable growth helped PBs to get
significantly higher share in the profit pool.
India’s GDP growth is
higher than the world GDP
growth
Increase in level of Money
Opportunity for
investments and crediting
Highly under-penetrated
Banking sector

7. 7
Q – Quality
28.71% 29.11%
23.40% 26.40% 27.92%
2.983% 2.772% 2.898% 3.051% 3.003%
ROTA & ROE trend
ROE ROTA
Steady growth in ROTA & ROE for IndusInd Bank for
the last 5 years.
• They have maintained a stable EBIT on Asset for 5
years when in industry, it has decreased
• ROA & EM improved for the last 5 years resulting
in stable ROE ( Du Point Analysis)
Building CASA transaction (Higher CASA Ratio than
market and increasing at a rate of 6.3%):
• Expanding branch and ATM network at a rate of
6% & 4% respectively
• Focus on specific target market segment
• Differentiated service proposition like diversified
vehicle finance
2014 2015 2016 2017 2018
0.33 0.34 0.35 0.37
0.44CASA Upstick
1
2
3
4
5
6
5.25%
4.97%
5.11%
5.36%
5.17%
4.70%
4.80%
4.90%
5.00%
5.10%
5.20%
5.30%
5.40%
2014 2015 2016 2017 2018
NIM1
0
10
20
30
40
50
60
70
2014 2015 2016 2017 2018
Gross Credit & Net Credit Cost
Gross Credit Cost Basis Point on Advances
Net Credit Cost on Advances
The average NNPA & GNPA for IndusInd Bank is 0.39%
& 0.62% for the last 5 years while Capital grew at a 21 %
which is comparatively better than industry Ratios
0.71%
0.50%
0.54%
0.59%
0.77%
0.38%
0.31%
0.36% 0.39%
0.51%56.77%
77.58%
82.73%
58.39% 56.26%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
2014 2015 2016 2017 2018
PCR Ratio decreasing YOY
GNPA NNPA
-0.066%
0.191% 0.195%
0.364%
-0.100%
-0.050%
0.000%
0.050%
0.100%
0.150%
0.200%
0.250%
0.300%
0.350%
0.400%
2015 2016 2017 2018
Slippage Ratio
5
32
4
Stable NIM Ratio for last
years 3 years around 5%
Slippage Ratio is stable and
comparably better than
industry.
PCR decreased over the last
year so they are. NNPA & GNPA
are the lowest amongst the
industry
CASA Ratio is increasing on yoy
basis. The amount of Savings &
Current increases due to high
operation efficiency
Gross Credit & Net Credit
Cost decreased for the last
year.
Stable ROTA and ROE for the
years as the business quality
is good enough n the market
Overview of the quality of
IndusInd Bank

8. 8
Q – Quality
1. Improve Rural Banking & Microfinance
2. Focus on Productivity
3. Digitization of Business
4. Enriching Client Experience
5. Internal Collaboration & Cross Sales
6. Rebalancing of Loan Books
Unquestionable Integrity
Demonstrable Competence
Name Designation Prior Experience
Mr. Romesh Sobti MD & CEO Over 40 years banking career with ABN AMRO
Bank N.V., ANZ Grindlays Bank Plc & State Bank
of India
Mr. Paul Abraham COO Managing Director of ABN AMRO Central
Enterprise Services
Mr. Suhail Chander Head – Corporate & Commercial
Banking
Head – Consumer & Commercial Banking, ABN
AMRO Malaysia & Singapore
Mr. Sumant Kathpalia Head – Consumer Banking Head – Consumer Banking, ABN AMRO Bank
(India)
Mr. S.V. Zaregaonkar CFO Chief Manager Dena Bank
46.97%
9.21%
6.11%
14.96%
0.10%
Share Holding Pattern
FII DII Public Promoter Others
3.50%
1.60%
1.50%
1.40%
1.40%
Top Holders
Bridge India
Fund
Uti-Equity
Fund
Govt. Of
Singapore
Afrin Dia
Planning
Cycle
through
FY20
Loan Growth
Revenue Growth
RoRWA
Branch Network
Customer Base
CASA Ratio
25%-30% growth target
Targeted >2.4%
More than 2000
Targeted 40% for FY20
Strategic Thinking to achieve growth target
25%
43%
19%
2.37%
1320
On track
Q4-FY 18 Outcome
Exceed Balance Sheet Growth
More than double > 20 mn
Growth Mindset
ICICI Prudential Life Insurance Company
Major Government Policy reform initiatives were undertaken, which will have a significant
and structural impact on the economic and business environment over the next 3-5 years
The Quality of Underwriting & Disclosure is high
Management team will remain integrated after the merging with BFIL
MD Mr Romesh Sobti, took charge in February 2008 and has since been
effecting structural and operational changes to improve productivity
and efficiency
Name Type
Bhandari & Associates
Secretarial
Audit
Price Waterhouse & Co Chartered
Accountants LLP
Statutory
Different
Auditors

9. 9
G – Growth
36.85%
44.01%
48.08%
52.18%
56.26%
60.25%
64.12%
67.80%
71.29%
2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E
Additional
Services
(Ease of Use) Mobile Banking, Micro
ATMs, Debit Card, Value added services
like Rural Insurance
Improve Basic
Banking Services
Microfinance, Microinsurance, Savings
Bank Accounts., Recurring Deposits
Home Improvement Loans, 2 Wheeler,
Personal, Secured Asset Creation
Tech. Products E-Commerce Payments, Retail
Distribution, Cost Optimization
Longer Tenure Loan
& Larger Ticket Size
IndusInd Bank’s
Banking Capabilities
BFIL’s Large Presence
in Under Banked
Areas Across Country
Strong Liability Franchise
Savings Bank Accounts
Increase
Current Accounts Increase
Fixed Deposits Increase
Recurring Deposits Increase
Stronger CASA Base resulting
in lower cost of funding
IBL & BFIL together bridging
the Financial Inclusion gap
0.00
1000000.00
2000000.00
3000000.00
4000000.00
5000000.00
6000000.00
7000000.00
2017 2018 2019E 2020E 2021E 2022E 2023E 2024E 2025E
Deposits overview
Total Deposists Demand Deposits
Savings Deposit Term Deposits / Fixed Deposits
Linear (Total Deposists)
Demand Deposits will be increasing around
21 % CAGR for the next 7 years.
Branch Network increase at a
CAGR of 6.5%
Include Digitization in operation
Merger will give the access to 3600
rural branches
For the last 10 years customer has
shifted to private banks
Diversified Retail Products
 PAT growth rate for
Private Sector Banks
has increased
around 18% CAGR
for last 10years.
 Due to the inorganic
growth with M&A
we are expecting a
PAT growth of
33.19% CAGR.
0
100000
200000
300000
400000
500000
600000
700000
800000
Total Income vs PAT
Total Income PAT
Income Growth

10. 10
G – Growth
60.00% 60.00% 58.45% 56.95% 55.48% 54.05% 52.66%
40.00% 40.00% 41.55% 43.05% 44.52% 45.95% 47.34%
2017 2018 2019E 2020E 2021E 2022E 2023E
Loan Mix Shifting towards CFD
Total Advances for Consumer Finance for Indusind Bank
Total Advances for Corporate banking for Indusind Bank
1130805.076
1449536.576
1696128.621
2015310.84
2394557.661
2845172.206
3380584.655
4078765.415
0
1000000
2000000
3000000
4000000
5000000
2017 2018 2019E 2020E 2021E 2022E 2023E 2024E
Loan Projection For IndusInd Bank
Distribution fee: High
growth due to traction in
third-party products and
also due to good traction
seen from distributing
home loans for HDFC.
Two-Wheelers Portfolio:
~80% of the transaction is
going on credit card.
IndusInd Bank is expanding
in this two wheelers market
with credit card loans
0.0429 0.0429
0.0430 0.0431 0.0433 0.0434 0.0435 0.0436 0.0433
0.0420
0.0430
0.0440
2017 2018 2019E 2020E 2021E 2022E 2023E 2024E 2025E
Credit Cost
1.1
1.2
1.3
2017 2018 2019 2020 2021 2022 2023 2024
Loan to deposit With its operating efficiency, retail
spreading and merging with BFIL it
will get the more liquidity for
unforeseen fund requirements , so
the Loan to Deposit Ratio will
decrease. The ratios are not too
high or too low either
Merger with Bharat Financial Inclusion
• Huge increase in outreach with ~1,400 well-spread
MFI outlets with 6.8 Mn borrowers
• Large untapped deposit potential from rural and
underserved customers
• Stronger CASA Base resulting in lower cost of funding
• Cost of funds reduce by 3%
• IBL’s banking capabilities + BFIL’s large presence in
Under Banked Areas = Bridge Financial Inclusion Gap
• 100% Eligible as PSL Fee income of 1%-1.5% on excess
The loan book will be more
diversified
• Interest Income will
increase
IndsiInd Bank is expected to
become more consumer focus
(Retail) because of their
improvement of rural operation
with BFIL.
Credit Cost is increasing on
yoy basis
It implies IndusIndbank is
becoming profitable on yoy
Average yield increasing is the
main cause
26.8
33.88 38.43
47.95
60.08
80.90
97.25
118.26
0
20
40
60
80
100
120
140
2014 2015 2016 2017 2018 2019E 2020E 2021E
EPS (INR)
FY14-18 CAGR :22.36%
FY18-21 CAGR: 25.32%
The IndusInd Bank EPS are
increasing at a rate of 22.36% of
CAGR, for the operation
efficiency it gained from IT
infrastructure. It is expected to
increase at the rate of of 25%. As
it is the break down a firm’s
profit, it signifies IndusInd Bank
will be more profitable in future

11. 11
• The bank recapitalization plan by Government of
India is expected to push credit growth in the
country to 15 per cent
• The Insolvency and Bankruptcy Code (Amendment)
Ordinance, 2017 Bill has been passed by Rajya
Sabha and is expected to strengthen the banking
sector
• The digital payments system in India has evolved
the most among 25 countries which will give the
banks a competitive edge
L-Longevity
Long Term Relevance
Enhanced Spending on
Infrastructure
Speedy
implementations of
projects
Continuation of
Reforms
Robust growth in
Banking sector to
meet credit needs of
rapidly growing
businesses
IndusInd
Bank
ICICI Bank HDFC Bank Axis Bank Kotak
Mahindra
Bandhan
Bank
RBL Bank
Cost to
Income(%)
39.22 63.55 39.86 52 52.04 43.43 39.96
 Lowest Cost to Income Ratio among peers – High efficiency and profitability
 Rising CASA Ratio and Fee Income will lead to Industry leading earnings growth
Well diversified Revenue streams with high quality Non-
Funded Revenues at 38%
62%
5%
2%
6%
8%
6%
7% 4%
Net Revenue Stream (FY18)
Net Interest Income
Trading & Other Income
Genral Banking Fees
Investment Banking Fees
Distribution Fees
Foreign Exchange Fees
Loan Processing Fees
Well diversified Funding Sources enduring liquidity
9%
21%
14%
5%7%
11%
1%
6%
1%1%
9%
4%
11%
Diversified Funding Sources
CA Deposits
SA Deposits
Retail & SME TD
Public sector Units TD
Financial Institutions TD
Corporate TD
Capital Markets TD
ILB’s Focus on India’s 19% unbanked
population for growth ensure longevity of
growth
Multi- decadal opportunity for
Private banks in India due to the
unmet financing needs
Competitive Advantage

12. 12
5.3
15
C URRE NT P OT E NT IA L
RURAL CREDIT MARKET
(RS.TRILLION)
L-Longevity
• Rural India Households: 168 mn
• Considering an Accessibility of 80% and a Credit
rejection of 20%
• Balance Households : 100 mn
• Average Household Borrowing : Rs 1,50,000
• Potential Market: 15 Trillion
• Cashless Collections & Disbursals
• Online Credit Underwriting
• Facilitate e-commerce
IndusInd well positioned to grab the opportunity -> Sustained Growth Sustainable Banking
Rural Opportunity – 3x Current Market
Regulatory
Compliance
Environment
al
Social Governance
• Operational
Compliance
• AT-1 Capital
Issuance
• Liquidity
management
• Solar ATMs
• Thin Servers
• ESMS Policy
• Financing
Renewable
Energy
• LEEDs certified
building
• Board Level CSR
Committee
• Participation in
CDP, DJSI Surveys
• Environmental
Lending Policy
• Integrated
Financial
Reporting
• Micro Credit
• Rural Branches
• Priority Sector
Compliance
• Critical Care
Support
• Over 1,700 IBL + BFIL Rural Branches
• Access to 1,00,000+ Villages
• Doorstep Delivery
N e t w o r k
T e c h n o l o g y
P r o d u c t s
• Assets: Microfinance, Home Improvement,
2-Wheeler, Consumer Durable Finance
• Liabilities: Saving A/C, Recurring Deposits
• Services: DBT, Remittances
8.79%
8.91%
9.06%
9.26%
9.14%
8.50%
8.60%
8.70%
8.80%
8.90%
9.00%
9.10%
9.20%
9.30%
2014 2015 2016 2017 2018
Basel 3 Leverage Ratio
Perfectly Maintained

13. 13
P – Price
FY18(IIB) FY21(Merged Entity) CAGR
PAT 36059.86 85193.64 33.19%
EPS(INR) 60.08 123.76 27.24%
Exit P/E (x) 30.93 30
Mkt Cap (Millions) 1115394.75 2555809.13 31.84%
Stock Price (INR) 1858.3 3712.72 25.95%
Yes Bank Kotak Mahindra Bandhan Bank RBL Bank IDFC Bank Average Expected
Price(Relative)
P/E 18.99 38.19 51.96 38.8 26.95 34.98 Rs. 2101.48
PEG Ratio
2015 2016 2017 2018
P/E 26.15 25.16 29.72 29.91
Earnings
Growth 0.27 0.27 0.25 0.26
PEG 0.95 0.92 1.17 1.16
• Current P/E 30.93x and
P/B 4.75x
• FY21 P/E 15.02x and P/B
2.89x
• 3 year Target price of INR
3712.72 at exit P/E of 30x
• Robust 25.95% return
CAGR
• Current Target Price of
INR 2578
Excess Return Valuation
Before Acquisition:
Cost of Equity: 10.23%
Intrinsic Share Price. : 2554 Rs
On comparing with current market
price of 1858.3, We find the Stock
to be undervalued by 24%
After Acquisition with Synergies:
Cost of Equity: 10.35%
Intrinsic Share Price : 2578 Rs

14. 14
P – Price
Total Loan given by Banks
Private Sector Bank's(PVB) Share
IndusInd Bank share of
PVB
Sector wise
lending
Interest
Income
• Private bank Share is 26.86%
• Growing at 2.51% and expected to reach 34%
Interest Income is obtained by multiplying average sector interest rate with
loan lent to particular sector
• IndusInd share is 5.32% in 2017
• Interest Income is expected grow at 20-25%
• Expected Loan growth is 12.1% by RBI
• Our regression model value is around 14%
Valuation Method: IndusInd Bank
Capital Expenditure and Net working capital change are
very less we have used Excess Return Valuation which
is used to valuate Financial Institution
Revenue and Expense Projection using Top down Approach
Excess Return = PAT – Equity Cost
Cost of Equity
IndusINd bank = 10.23%
BFIL = 11.08%
Terminal Growth rate is assumed to be 5%
Excess return is discounted at cost of equity to obtain Present value
Employee salary
using regression
model
Provision are
projected using past
Provisions to
loanable fund ratio
Tax Rate is 34.02%
Interest Expense Calculation
• Deposits are breakdown into Current, Saving and Term
• Projected using segment growth rate
• Past Deposit Maturity pattern is multiplied with interest rate to calculate
the interest expensed
Operating expense are
projected wrt to interest
income earned using
historical average
Valuation Method: BFIL
NBFC Loan
Growth
BFILs Long term loan as % of
Total NBFC LOAN
BFIL has share of
21.71%
Calculate Interest Income using sectoral breakdown
Short term Advances projected
using regression with Long term
advances
Interest charged
is 19.75% which
is lowest in
country
Regression Model Factors GDP, Rural
growth, MSME growth and vehicle
population growth
• Interest Income is expected to rise bu 3% over the next 5
years due to access to 3600 branches
• Cost of Borrowing for BFIL will be reduced by 1-1.5%
taking the total cost of borrowing to 7.5 %
• Operational synergies

15. 15
Financial Summary
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
PAT 4854 6841 8519 10304 12591 15393 15231 18489 22083 27768
EBITDA 7611 11528 14362 17388 21192 25840 26068 31576 37708 47148
Total Revenue 27669 36389 43959 52878 63306 76009 83190 99068 117575 142959
0
50000
100000
150000
200000
250000
Financial Projections
Change by 25 basis point Change in Stock Price
Total Loan growth rate in India 360 Rs
Growth in Private sector bank 189 Rs
Cost of Equity 99 Rs
Terminal Growth Rate 60 Rs
CAGR Growth Rate
Total Revenu 18.2%
EBITDA 20.2%
PAT 19.1%

16. 16
Risks & Concerns
Risk Type Sorces Policies Risk Management Approach
Credit Risk
Arises from both transaction and portfolio level
• Transaction Risk (or Default Risk), which
represents the risk arising from individual
credit exposures and
• Portfolio Risk, which represents the risk
inherent in the portfolio of credit assets
• Credit Risk Policy
• Bank Risk Policy
• Risk-based Pricing
• Policy on Internal Capital
Adequacy Assessment Process
• Fraud Risk Management Policy
• The Bank maintained credit growth
& portfolio quality even in a
challenging environment
• Retail products governed by risk
mitigation measures for customer
selection & underwriting
Market
Risk
• Price risk for bonds, forex, equities and
bullion
• Interest rate risk for investments,
derivatives, etc
• Exchange rate risk for currencies
• Trading / liquidity risk.
Funds and Investment Policy
• Foreign Exchange Policy
• Derivatives Policy
• Equity Policy
Market Risk Management Policy
• Exposures Management & Limit
Structures
• Valuation Policy
• The Bank adopted the standardized
approach to compute appropriate
capital charge towards market risk
• Contingency Funding Plan covers
all available funds sources to
supplement cash ow gaps
• Contingency plans are in place to
meet impact of stressed liquidity
scenarios
• Contingency Funding Plan covers
Operation
al Risk
• Failure of systems
• Employee Disaster
• Technology glitches
• External factors, etc., including legal and
regulatory risks
• Operational Risk Management
Policy
• Business Community Management
Policy
• New Product Programmes Policy
• Reporting Tool has been designed
for reporting and responding
• Implemented a comprehensive
Bank-wide Business Continuity
Planes ponding to operational risk
System
Risk
• Malfunctioning at the system because of
external entities
The Information Security Policy deals
with security of information in any
form or medium across the Bank. The
policy directs managerial decision-
making and facilitates secure business
operations
• Cyber Security Policy
• Movement of customer identity
data between systems or between
systems & physical endpoints is
monitored and controls like
encryptions have been put in place
Effective Risk Management
Risk Type 2014 2015 2016 2017 2018
Capital requirements for Credit
Risk
52751 69046 89,424 109,832 1,30,094
Portfolio Subject to Standardised
approach
52751 69046 89,424 109,832 1,30,094
Securitisation exposures 0 0 0 0 0
Capital requirements for Market
Risk
2265 3920 4926 6002 8,790
Standardised Duration Approach
Interest Rate Risk 1885 3326 4130 4851 7078
Foreign Exchange Risk (including
gold)
180 270 304 304 304
Equity Risk 200 324 482 847 1408
Capital requirements for
Operational Risk
5518 7070 10319 13342 16956
Basic Indicator Approach 5518 7070 10319 13342 16,956
Minimum Capital requirements
at 9%
60534 80036 104669 129176 155,840
Minimum CRAR + CCB at
10.875%
62488 81477 111938 147117 1,88,307
Total Capital Funds 93049 107508 180193 219674 260,215
IndusInd Bank has maintained all the Capital requirement for risk properly for
the last 5 years. They implied integrated risk management. The Bank has
established an Enterprise-wide Risk Management Department, independent of
the Business segments, responsible for Bank-wide risk management covering
Credit risk, Market risk (including ALM) and Operational risk. The Risk
Management Department focuses on identification, measurement, monitoring
and controlling of risks across various segments.
30.3%
17.5%
12.2%
13.9%
2.0%
1.8%
2.5%
3.7%
1.9% 3.8%
1.9% 5.6% 2.9%Large Corporates Medium Corporates
Small Corporates Comm. Vehicle Loans
Utility Vehicle Loans Small CV
Two Wheeler Loans Car Loans
Tractor Equipment Financing
Credit Card Loan Against Property
BL, PL, GL & Others
IndusInd Bank are focusing more on the increasing their retail
loan channel through merging and distribution with the BFIL
in rural regions. In FY2018 their 40% loan are in consumer
Finance area with focus to increase it might increase credit
risk.
The credit growth for banks has increased around 12.8% for
the last 5 years

17. 17
Conclusions & Investment View
 Recommendation on
Sep 5 2018: Buy at Rs
1858.3
 Target price for
September 2021:
Rs.3712.72
 CMP as on 5th Sept
2018: Rs. 1858.3
Positives Negatives Overall score
Quality
• Competent Management
• High CASA ratio and low NPA
• Value Migration from Public to
Private Sector Banks
• Increasing Cost of
Deposits
9.5/10
Growth Prospects
• Access to Rural Banking after
BFIL acquisition
• Diversification of Products
• 19% unbanked population
• Competitive NBFC
Market
9/10
Longevity
• Huge rural opportunity 3x time
• Huge Unmet financial need by
Industrial sector
• Other private banks are
trying to access rural
market
8/10
Price
• At 29x PE stock stock is over
valued but price is justified
huge scope,
High payback ratio (3.7x)
Stock has already
7.5/10
Total score 8.5/10