Indusind Bank: 1055-1085 May Be A Big Hurdle

Trading Idea: Indusind Bank

CMP: 1040

Either sell around 1045-1055 or on rise 1085-1100;

TGT: 994*-970-949-935*-895-855*-832-799* (1-3/6M)

TSL> 1110

Note: Consecutive closing (3 days) above 1110 zone for any reason, IIB may further rally up to 1150*-1200 & 1280 in the near to long term (alternative bullish case scenario).

Q4FY16 PAT of IIB printed at Rs.620.35 cr against consensus of 629.20 (YOY: 495.27; QOQ: 581.02).

Q4FY16 diluted EPS was at 10.33 against estimate of 10.47 (lagged by 1.35%).  Previous median forecast of EPS was at 11.13 (YOY: 9.20; QOQ: 9.68).

In short Q4FY16 result of IIB was slightly below street estimate and provision also raised by 20.65% from Rs.177 cr to Rs.213.6 cr (QOQ). But, retail loan momentum is picking up and many analysts are banking up on it with 28% CAGR in EPS and giving a TP of around 1175 in 12 months.

For IIB:

Q4FY16 TTM EPS: 39.15 (FY16/Actual-Diluted)

Projected FWD EPS: 46.45-55.05-65.25 (FY:17-19/Estimated)

Average PE: 22

As par BG metrics and current market parameters:

Present median valuation of IIB may be around: 905 (FY:16/TTM)

Projected fair value might be around: 985-1075-1170 (FY:17-19/FWD)

INDUSINDBK	EPS(TTM)	BV(Act)	P/E(AVG)	Low	High	Median	200-DEMA	10-DEMA
Q4FY16/TTM	39.15	193.4	22	881.58	922.00	901.79	902.33	986.98
FY17/FWD	46.45	215.75	22	960.26	1004.29	982.27	902.33	986.98
FY18/FWD	55.05	240.55	22	1045.38	1093.31	1069.34	902.33	986.98
FY19/FWD	65.25	268.15	22	1138.11	1190.30	1164.20	902.33	986.98

Analytical Charts: