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IndusInd Bank Prices rise 4% Along with Deposits and Net Advances

05 August 20225 mins read by Angel One
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On 5 October 2021, IndusInd Bank share prices increased by 4% intraday at Rs. 1164.10, becoming a major gainer on the BSE. This happened as the private bank reported better deposit and advance numbers for the September quarter.

The lender saw its deposits grow 21% year-on-year to Rs. 2,75,486 crores compared to Rs. 2,28,279 crores in the previous year. At the same time, its net advances rose by 10% to Rs. 2,21,821 crores against Rs. 2,01,247 crores in the same quarter last year.

Previously, the shares of IndusInd Bank had hit an all-time high of Rs. 1,159 on the BSE on 16 September 2021.

Let us look into the details of this private lender and its share price movement.

About IndusInd Bank

Launched in 1994, IndusInd Bank is a new generation private sector bank in India. In 2004, it got merged with Ashok Leyland Finance, then among the largest leasing finance companies and became one of the fastest-growing banks in the country.

As of 31 December 2020, IndusInd’s had a client base of 27 million served through more than 1760 branches and 150 banking outlets all over the country. The bank also has tie-ups with other banks to provide access to over 18,000 ATMs for its customers. It also has representatives outside India, including in London, Abu Dhabi and Dubai.

This financial institution’s business lines include retail banking, corporate banking, treasury, foreign exchange investment, HNI (high net-worth) banking, etc. It is a preferred banking partner for various Government entities, large corporates and PSUs (Public Sector Undertaking). The following is a brief list of IndusInd’s financial products/services:

  • Microfinance
  • Commercial and personal vehicle loans
  • Credit cards
  • SME loans
  • Personal loans
  • Wealth management services
  • Deposits
  • Demat services
  • Insurance
  • Forex services

IndusInd Bank Announces its Q2 Financials

IndusInd Bank recently announced its second-quarter (Q2) financials. According to this, the private lender saw a 10% growth in loans in Q2, while its deposits rose by 21%. Its deposits from small business customers and retail deposits rose to Rs. 1,11,749 crores as of 30 September 2021 compared to Rs. 1,05,737 crores on 30 June 2020.

The bank’s low-cost deposits – current and savings account (CASA) ratio remained unchanged at 42% QoQ (quarter-on-quarter) and 40.4% YoY (year-on-year).

In the previous quarter that ended on 30 June 2021, IndusInd’s consolidated net profits rose by 99.2% YoY to Rs. 1061 crores. Its net interest income (NII) also rose by 8% YoY to Rs. 3,563.7 crore compared to Rs. 3,309 crores in Q1 FY21.

However, IndusInd’s asset quality had deteriorated as GNPA (gross non-performing assets) ratio rose to 2.88% in Q1 FY21 from 2.67% in Q4 FY21. The net NPA (non-performing assets) ratio also rose to 0.84% from 0.69% in the previous quarter.

The Share Performance of IndusInd Bank

At 15:04 hours on 5 October 2021, IndusInd Bank’s shares rallied at Rs. 1,164.10 on the BSE, up by Rs. 44.50 or 3.97%. A few days ago, on 30 September, these shares were quoted at Rs. 1114.1 as of 13:24 hours on the NSE. These stocks were down 0.81% along with benchmark indices – Nifty down by 0.45% and Sensex down 0.41% at 59167.72.

These stocks had jumped 88.13% in a year, much higher than the benchmark indices’ rally- 54.44% for Nifty and 69.02% for the Nifty Bank index.

On 23 September 12:54 IST, IndusInd Bank was quoting at Rs. 1163, up by 1.91% on the NSE. It had risen for the third session in a row, up 137.27% for the last year, compared to a 64.52% spurt of Nifty and 84.27% in the Nifty Bank index.

On 16 September 2021, the shares of IndusInd Bank had risen to an all-time high of Rs. 1159.20, increasing by Rs. 105.35.

What Led to the Recent Share Gains of IndusInd Bank?

Previously in September 2021, IndusInd’s share gains likely arose due to positive news in the telecom sector. The Union Ministry had cleared a relief package for the debt-laden telecoms, providing a four-year moratorium on AGR dues.

As the banking sector had huge exposure to this sector (mainly to heavily indebted Vodafone Idea), investors were relieved to hear the news.

Recently, the bank updated its financials, stating that it gained 10% in net advances and 21% in deposits. This led to its stock being the second-largest gainer on Nifty50, ending 5% higher.

 

Frequently Asked Questions

  1. How is the IndusInd Bank stock performing recently?

As of 14:00 IST 6 October, 2021, IndusInd Bank stocks were down 2% to Rs. 1147.65. It had a market cap of Rs. 88,845.66 crores and PE (price to earnings) ratio of 27.05.

  1. Is IndusInd Bank a profitable venture?

Yes. IndusInd Bank had gained net profits of Rs. 2836.39 crores in FY21.

  1. How does IndusInd Bank have a stake in MRIL?

Recently, IndusInd Bank has acquired a 4.79% stake in McLeod Russel India Ltd. (MRIL), a tea plantation firm, via invocation of shares.

 

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