NEW DELHI: Shares of IndusInd Bank surged 8 per cent to Rs 1639.95 in Thursday’s session even as the private lender on Wednesday posted lower-than-expected financial results for March quarter.
The company’s profit dropped, provisions jumped, and asset quality deteriorated during Q4FY19. However, brokerages still show faith in the company.
“The stock jumped as the lender cleared its IL&FS exposure, which was an overhang,” said Sameer Kalra, Founder, Target Investing.
Motilal Oswal Securities has a buy recommendation on the stock with a target price of Rs 1,900. “The bank has achieved healthy coverage on its infra exposure, and also has healthy collateralization levels on the stressed exposure (140 per cent), which will help limit credit cost during FY20,” said the brokerage.
Bharat Financial-IndusInd Bank merger will strengthen the earnings profile and further boost the return ratios, the brokerage added.
On the other hand, Goldman Sachs maintained a neutral view on the stock with a target price of Rs 1,948. The global financial firm said that the loan growth momentum of the bank sustained and its core operating profit was in line with estimates.
Source: Economic Times