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Multi Baggers

Ventura Securities

12.00 AM May 5th

IndusInd Bank

BSE ID : 532187     NSE ID : INDUSINDBK

RECOMMENDED PRICE 1423.15

PEAK FROM RECO 1818.00 27.74%

CURRENT PRICE 1679.35 18.00%

IndusInd Bank Ltd (IIB) has emerged as one of the fastest-growing private banks in India. We initiate coverage on IndusInd Bank with a BUY with a price objective of Rs. 2007.

IndusInd Bank Ltd

IndusInd Bank Ltd (IIB) has emerged as one of the fastest-growing private banks in India. We initiate coverage on IndusInd Bank with a BUY with a price objective of Rs. 2007.

In our opinion IndusInd Bank’s (IIB) performance in the past has been exemplary and stands out notably given the fact that it has performed well in up and down economic cycles. We believe that as India’s growth story takes off, IIB should continue to maintain its stratospheric growth rate over the forecast period FY17-20. IIB’s planning cycle 4.0 lays out a road map of doing more of the same:

i). carrying on with its strategy of gaining market share while retaining profitability

ii). doubling profits while doubling the loan book and the customer base

iii). digitization to the fore as it seeks to differentiate, diversify and build domain leadership.

We initiate coverage on IndusInd Bank with a BUY with a price objective of Rs. 2007 (3.9x FY20 P/Adj BV) representing a potential upside of 41.4% over the next 30 months. Currently, the stock is trading at 2.8 FY20 P/Adj BV).

Over the forecast period FY16-19 we expect:

1. Advances to grow at a CAGR of 22.6% to Rs.2,08,497 cr by FY20 while NII is expected to grow at a CAGR of 19.8% to Rs.10,434 cr over the same period.

2. Deposits to grow at a CAGR of 24.2% to Rs.2,42,439 cr by FY20 while it aspires to grow CASA ratio to 40.0% on the back of CASA deposits growing at a CAGR of 27.6% to Rs.99,975 cr.

3. Fee Income to outstrip balance sheet growth on the back of robust expectation of 22.8% CAGR to Rs.7,719 cr by FY20.

4. Where already 70% of AUM is linked to CLR we expect NIMs to fall slightly by 20 bps to 3.9% by FY20. ? Cost to Income to improve by 323 bps to 43.5% by FY20.

5. IIB to maintain its best in class asset quality

6. Return ratios to improve further as RoA is expected to expand by 8 bps to 1.9% while RoE to broaden by 338 bps to 18.3% by FY20.

For full details, Click on the attachment.

Disclosures and Disclaimer Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member of BSE, NSE and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in last five years except administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records. Ventura Commodities Limited, Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of VSL. Research Analyst (RA) involved in the preparation of this research report and VSL disclose that neither RA nor VSL nor its associates (i) have any financial interest in the company which is the subject matter of this research report (ii) holds ownership of one percent or more in the securities of subject company (iii) have any material conflict of interest at the time of publication of this research report (iv) have received any compensation from the subject company in the past twelve months (v) have managed or co-managed public offering of securities for the subject company in past twelve months (vi) have received any compensation for investment banking merchant banking or brokerage services from the subject company in the past twelve months (vii) have received any compensation for product or services from the subject company in the past twelve months (viii) have received any compensation or other benefits from the subject company or third party in connection with the research report. RA involved in the preparation of this research report discloses that he / she has not served as an officer, director or employee of the subject company. RA involved in the preparation of this research report and VSL discloses that they have not been engaged in the market making activity for the subject company. Our sales people, dealers, traders and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ information inconsistent or different those made in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, may give rise to or potential conflicts of interest. 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Similarly, this document does not have regard to the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular circumstances and, if necessary, seek professional/financial advice. And such person shall be responsible for conducting his/her/their own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document. The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. 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The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions, estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors or any other person. Any opinions and projections contained herein are entirely those of the authors. 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