What is making analysts confident about IndusInd Bank's growth in FY23

In a few ideas for profit from Moneycontrol Pro, Madhuchanda Dey of Moneycontrol.com talks about a stock that she is tracking closely, IndusInd Bank.

IndusInd Bank has been an outperformer in the past three months not only within the banking pack but also with respect to the benchmark Nifty. The steady execution in the fourth quarter, the promising outlook for 2022-23, and the undemanding valuation make analysts reasonably confident that the stock has headroom for further rerating, according to Dey.

All the issues with respect to either the corporate book or the whistleblower’s allegation with respect to the MFI portfolio of the bank's subsidiary are behind us, said Dey.

"Growth is gradually picking up and the bank is getting ready for strong growth in FY23. With the high yielding retail book, steadily improving liability and waning asset quality concerns as the economy improves, analysts see sustenance of its high-interest margin and expansion in return ratios," said Dey.

Whistleblowers alert RBI about evergreening of loans at IndusInd Bank subsidiary

In this context, the valuation is still undemanding, according to Dey. The bank has seen an improvement in asset quality thanks to the revival of both vehicles as well as the microfinance portfolio.