INDUSIND BANK LTD - Quantamental Equity Research Report

Quantamental Equity Research on INDUSIND BANK LTD | Release: 12 Jan 2019 23:52:42 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:INDUSINDBK and BSE CODE:532187
Last Close:  INR 1515.15
Fair Value:  INR 1874.2
Est. Price by Mar 19:  INR 2278.45
Market Capitalization (INR Crs):  91270.64
Industry:  Banks
Rating:  STRONG BUY
Upside:  50%
Company Profile
IndusInd Bank is engaged in banking and para-banking services. The Bank is involved in accepting deposits, such as savings accounts, current accounts and fixed deposits, and banking solutions. 
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 20% 98% 202%  
EBIT % 20% 70% 141%  
Earnings % 26% 101% 240%  
Book Value %  16% 129% 217%  
Stock Total Return %  29% 110% 334%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 16.79  
(B) FII/FPI 53.80  
(C) DII/Insurance Companies 9.88  
(D) Public holding < 2 lakhs of cap. 5.66  
(E) Others 13.87  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 183 272 334 426 497 882 981 1431 1850 2278 2834 3299 3599 3678  
Return on Equity 16% 15% 18% 14% 16% 18% 13% 14% 15% 21% 21% 20% 19% 16%  
Price to Earning  21.5 21.9 19.4 21.0 18.6 26.0 25.5 29.8 30.8 22.4 22.4 22.4 22.4 22.4  
EVTI 8.9 9.1 8.2 7.9 7.9 9.7 9.4 10.7 11.4 11.3 11.3 11.3 11.1 10.8  
EVTIFM 21.5 21.9 19.4 21.0 18.6 26.0 25.5 29.8 30.8 22.4 22.4 22.4 22.4 22.4  
Price to Book Value 3.5 3.3 3.5 3.0 3.0 4.6 3.4 4.2 4.7 4.8 4.8 4.6 4.2 3.7  
Debt to Equity  14.6 10.5 11.3 8.6 8.7 9.3 6.8 7.4 8.1 8.0 7.7 7.1 6.4 5.6  
Dividend Yield 1% 1% 1% 1% 1% 0% 0% 0% 0% 1% 1% 1% 1% 1%  
Cash Flow to Firm -8% -8% -9% -4% -2% -8% -4% -8% -5% -8% -5% -3% 0% 4%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales     17,280.75     22,259.58     27,347.81     31,971.15     35,472.91     37,246.56  
EBITDA     15,475.62     19,331.40     23,750.29     27,765.45     30,806.56     32,346.89  
EBIT     15,263.98     19,058.79     23,454.64     27,462.42     30,514.01     32,081.87  
PBT       5,480.68       9,275.49     11,537.92     13,430.81     14,652.89     14,973.50  
NPAT       3,605.99       6,122.75       7,616.18       8,865.68       9,672.38       9,884.00  
Price to Earning             30.80            22.42            22.42            22.42            22.42            22.42  
Price to Book Value              4.73              4.76              4.81              4.59              4.19              3.67  
Debt to Equity               8.09              8.02              7.67              7.12              6.42              5.63  
Return on Equity              0.15              0.21              0.21              0.20              0.19              0.16  
Enterprise Value to Total Income (EVTI)            11.39            11.30            11.34            11.27            11.09            10.83  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            47.41            47.90            48.03            47.65            46.86            45.68  
Price or Est. Share Prices       1,850.40       2,278.45       2,834.20       3,299.20       3,599.40       3,678.20  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       9,275.49     11,537.92     13,430.81     14,652.89     14,973.50  
Interest       9,783.30     11,916.72     14,031.61     15,861.12     17,108.38  
Depreciation          272.62          295.65          303.02          292.55          265.02  
Cash Flow Before Tax     19,331.40     23,750.29     27,765.45     30,806.56     32,346.89  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax     12,760.66     15,677.57     18,327.97     20,335.41     21,352.18  
Terminal Cash Flow                                                                                      -    5,83,866.87  
Total Cash Flow     12,760.66     15,677.57     18,327.97     20,335.41  6,05,219.05  
Present Value of Cash Flow  4,52,732.92  
Debt  3,39,834.14  
Value of Equity  1,12,898.79  
Fair Value Per Share       1,874.20  
Equity          91,271
Debt       1,89,928
Beta Take from Reuters 1.7
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid            9,783
Tax Benefit            3,346
Interest Net of Tax            6,437
Debt       1,89,928
Cost of Debt 3%
Cost of Equity 20%
Debt Weight 68%
Equity Weight 32%
WACC 9%
Cash Flow of Mar-23 E     21,352.18
Growth 4.3%
Present Value of Terminal Cashflow  5,83,866.87
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  HDFC Bank        2,111.90       5,74,332          390.86            23.66              7.32              9.93            26.37              5.40            30.15              8.58              0.59            19.09         -586.55       1,12,861            21.43               580              7.32            23.03              8.79            20.59          800.14
   2  Kotak Mah. Bank        1,223.20       2,33,331          264.67            17.36              7.93              8.49            81.09              4.62            35.36              4.95              0.06            16.99         -310.28          43,316            30.02              -132              5.91            20.39            10.98            66.21          458.82
   3  Yes Bank           184.25          42,604          111.40            18.44              7.42              6.46            17.02              1.65              9.51            10.70              1.46            15.73         -988.14          34,819            19.19                -84              9.93            50.64           -23.46             -3.79          221.02
   4  IndusInd Bank        1,515.15          91,271          389.53            20.96              7.97              7.53            24.35              3.89            23.44              8.09              0.49            18.35         -293.15          28,929            10.98              -189              5.98            34.45              7.04              5.21          753.73
   5  ICICI Bank           378.55       2,43,822          158.59              4.43              4.98              9.59            35.84              2.39            70.48              7.28              0.40              3.80            22.67          73,048                  -                -108              2.60            11.26         -860.25           -55.84          138.55
   6  Bandhan Bank           454.40          54,201            78.65            17.31            10.59              9.88            37.90              5.78            32.10              3.64              0.22            15.77       2,391.93            7,535            82.28               558              2.73            40.00           -32.07            10.40          159.74

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