IndusInd Bank’s Share Price Soars over 3% to Reach 52-Week High on Strong Q1 Business Update
IndusInd Bank, one of India’s leading private sector banks, witnessed a significant surge in its share price, climbing over 3% to hit a 52-week high. This impressive performance is attributed to the release of the bank’s robust Q1 business update.
According to the report, the bank’s net advances grew by an impressive 21% to reach ₹3,01,041 crore in Q1FY24, compared to ₹2,47,960 crore during the same period last year. On a sequential basis, the advances growth was 4% compared to ₹2,89,924 crore in the previous quarter that ended in March 2023.
The bank also noted an increase in retail deposits and deposits from small business customers. As of June 30, 2023, these deposits amounted to ₹1,50,691 crore, reflecting growth compared to ₹1,43,021 crore as of March 31, 2023.
However, the CASA Ratio for the quarter stood at 39.9%, down from 43.2% in the June quarter of the previous year.
Prabhudas Lilladher Pvt Ltd, a leading brokerage firm, anticipates IndusInd Bank’s loan growth to surpass the overall system growth, projecting an increase of approximately 3% QoQ. The firm also highlighted the positive trend of retail deposit accretion and the steadily increasing share of granular deposits.
Gaurav Jani, a Research Analyst at Prabhudas Lilladher Pvt Ltd, stated, Retail deposit accretion remains a key factor, and granular deposits have been inching up with a share of 43.4% as of Q1’23, compared to 42.5% in Q4’23 and 41.0% in Q1’23, which is a positive indicator.
Considering the bank’s impressive performance, the brokerage firm maintains a Buy rating on the stock, with a target price of ₹1,530 per share.
In another development, IndusInd Bank’s promoter, IndusInd International Holdings Ltd (IIHL), recently approved a plan to raise up to $1.5 billion. The move aims to increase its shareholding in the bank from the existing 15% to 26%. This increased promoter stake will support the bank in funding the acquisition of Reliance Capital.
Over the past year, shares of IndusInd Bank have shown remarkable growth, rallying more than 71%. This upward trajectory is indicative of the bank’s strong performance, prompting investors to show confidence in its potential.
In conclusion, IndusInd Bank’s shares surged to a 52-week high following the release of a positive Q1 business update. With impressive growth in net advances, retail deposits, and the approval for promoter stake increase, the bank continues to solidify its position in the industry. The positive sentiment from investors contributes to the bank’s remarkable performance and overall growth in share value.
