IndusInd Bank Q2 PAT likely to grow 26% to Rs 316 cr: Poll

Written By Unknown on Sabtu, 12 Oktober 2013 | 16.02

Private sector lender IndusInd Bank will declare its second quarter (July-September) numbers on Monday. Analysts on an average expect net profit to grow by 26 percent year-on-year to Rs 316 crore during the quarter, according a CNBC-TV18 poll.

Net interest income is likely to increase by 32 percent to Rs 675 crore in second quarter from Rs 510 crore in a year ago period.

What to watch for

Analysts believe high dependence on wholesale funding will affect cost of funds and hence, net interest margin will also get impacted.

The bank's 50 percent of funding is done via wholesale funds. Hence, net interest margin could be impacted by 5-15 basis points Q-o-Q.

Non interest income of the bank is expected to recede from the high growth seen last quarter. Non interest income was up by 48 percent year-on-year to Rs 471 crore during April-June quarter.

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Overall its non interest income will be led by core fee income including forex, feel analysts. They expect the bank to report core fee income at around Rs 295 crore in September quarter, which had gone up by 26 percent to Rs 260 crore in June quarter.

According to analysts forecast, however, trading income will be weak on mark-to-market (MTM) losses in the quarter gone by. About 65 percent of its portfolio is in government securities while the remaining 35 percent, out of that 20 percent exposure is to interest rates, which may report losses, say analysts.

In the June quarter, trading income jumped two times Y-o-Y to Rs 105 crore.

Meanwhile, analysts feel strong growth in forex income could contain the impact of likely MTM losses.

Asset quality is the best in class for the bank, but analysts are watching for any worsening especially due to pressure in the commercial vehicle portfolio.

Loan growth expected to be more than 25 percent

Commercial vehicle portfolio is likely to moderate on the back of slower demand during the September quarter

According to analysts, launch of new products will drive growth in consumer finance portfolio while corporate sector loans are expected to be driven by working capital.

Meanwhile, JP Morgan on October 9 downgraded IndusInd Bank to underweight and cut price target by 25 percent to Rs 375 a share.



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