IndusInd Bank expects 14-16% growth in FY22; sees uptick in vehicle segment

As of today, October 29, the IndusInd Bank's stock is trading at Rs 1,150.45 on the NSE, up around 2.32 percent in the last one month alone.

In an interview with CNBC-TV18, Sumant Kathpalia, MD & CEO of the bank, discussed its performance.

He said, “This was indeed a quarter where we came back after five quarters. We have been seeing a declining growth on our corporate side for a long time. So this was the first time that we saw growth and I think there are factors which are fueling the growth. The demand has come back on the retail side. So, the vehicle segment has really started doing well, our disbursements were almost 72 percent higher than what it was a year ago. We have started seeing the growth coming back.”

“The vehicle side of the segment is reviving very fast. I think we saw growth in some parts of microfinance and microfinance segment did come back; in almost 90 percent of the states the demand is back. It is only about two or three states where the problem continues,” he mentioned.

“Also, we see growth coming back very strongly in portfolios, like loans against property, credit cards, personal loans, and Kisan credit card. So I think we have seen a very good quarter. The growth may have not been much in the retail overall, because the collections were very high. But I think the disbursements and card volumes are back to where it was pre-COVID.”

On the corporate side, Kathpalia said the growth has come back in the textile segment, NBFC segment, in capital expenditure and in the government segments. He added, “The SME segment is very, very strong we are seeing growth there. We were a little slow on the MSME segment, but we see that reviving very fast”

With regard to full year loan growth, Kathpalia said we will be in the 14 to 16 percent growth range. That means the second half will be much better than the first half.

On restructured book, he said, “So when you look at our restructured book, which is Rs 7,982 crore, which is 3.6 percent of our overall book, you have to look at it in a very different way. I think the segment which has the highest restructuring, that is 49 percent of the book belongs to the commercial vehicle segment. The restructuring in this segment comes from two pieces. One is the bus segment and the other is the small commercial vehicle segment. In the medium and heavy commercial vehicle segment, the bus segment has really got affected and I think it will take time to come back.”

He further added, “We are seeing large accounts coming out of restructuring so I don't believe the restructuring book is so much of a concern for the bank.”