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INDUSIND BANK 2023-24 Annual Report Analysis

Wed, 7 Aug

INDUSIND BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

INDUSIND BANK Income Statement Analysis

• Interest income during the year rose 25.8% on a year-on-year (YoY) basis.
• Interest expenses were up by 33.9% YoY during the same period.
• Operating expenses increased by 24.7% YoY during the year.
• The bank's net interest income (NII) increased by 17.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 4.6% in FY24 as against 4.7% in FY23.
• Other income increased by 15.0% YoY during the year.
• Net profit for the year increased by 20.6% YoY.
• Net profit margins during the year declined to 19.6% in FY24 from 20.5% in FY23.

INDUSIND BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	363,679	457,482	25.8%
Other Income	Rs m	81,728	93,958	15.0%
Interest Expense	Rs m	187,758	251,323	33.9%
Net Interest Income	Rs m	175,921	206,159	17.2%
Operating Expense	Rs m	113,459	141,476	24.7%
Pre-provision Operating Profit	Rs m	144,190	158,641	10.0%
Provisions & Contingencies	Rs m	69,759	68,871	-1.3%
Profit before tax	Rs m	99,322	119,792	20.6%
Tax	Rs m	24,891	30,022	20.6%
Profit after tax	Rs m	74,435	89,773	20.6%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	4.7	4.6
Net profit margin	%	20.5	19.6

Revealed: Our Big Prediction

INDUSIND BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 3,845.9 bn as compared to Rs 3,361.2 bn in FY23, thereby witnessing an increase of 14.4%.
• Advances for the year stood at Rs 3,433.0 bn as compared to Rs 2,899.2 bn during FY23, a rise of 18.4%.
• Cost of deposits for INDUSIND BANK rose 21.0% and stood at 5.6%, while yield on advances rose to 11.1%.
• The lender's investments rose to Rs 1,064.9 bn during the year from Rs 830.8 bn in FY23.
• Borrowing stood at Rs 476.1 bn, a fall of 2.9% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 5,150.9 bn as against Rs 4,578.4 bn during FY23, thereby witnessing a rise of 12.5%.

INDUSIND BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	549,603	631,040	14.8%
Advances	Rs m	2,899,237	3,432,983	18.4%
Deposits	Rs m	3,361,202	3,845,857	14.4%
Yield on advances	%	10.3	11.1
Cost of Deposits	%	4.7	5.6
Investments	Rs m	830,757	1,064,865	28.2%
Borrowings	Rs m	490,112	476,114	-2.9%
Total Assets	Rs m	4,578,366	5,150,940	12.5%

Current Valuations for INDUSIND BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 115.3, an improvement from the EPS of Rs 95.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,372.3, stands at 11.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.7 times, while the price to income ratio stands at 2.3 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	468.7	587.8
Earnings per share (Unadj.)	Rs	95.9	115.3
Diluted earnings per share	Rs	95.6	115.3
Avg P/E ratio	Rs	10.6	11.7
Avg P/ABV ratio	Rs	2.0	1.7
Avg Market Cap	Rs	791,025	1,052,055
Dividends per share (Unadj.)	Rs	14.00	16.50

Ratio Analysis for INDUSIND BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 89.3x during FY24, from 86.3x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 6.85x during FY24, from 7.01x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): INDUSIND BANK's capital adequacy ratio (CAR) was at 17.2% as on 31 March 2024 as compared to 17.9% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 14.2% during FY24, from 13.5% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.74% during FY24, from 1.63% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 14.34% during FY24, from 13.07% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. INDUSIND BANK's gross NPA ratio stood at 1.9% as of 31 March 2024 compared to 2.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of INDUSIND BANK was 0.6% in financial year 2024. This compared with 0.6% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	86.3	89.3
Debt to Equity Ratio	x	7.0	6.8
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	17.9	17.2
Return on Equity	%	13.5	14.2
Return on Assets	%	1.6	1.7
Return on Capital Employed	%	13.1	14.3
% of Gross NPAs	%	2.0	1.9
% of Net NPAs	%	0.6	0.6
Yield on Advances	x	10.3	11.1
Yield on Investments	x	5.7	6.2

To see how INDUSIND BANK has performed over the last 5 years, please visit here.

INDUSIND BANK Share Price Performance

Over the last one year, INDUSIND BANK share price has moved down from Rs 1,414.6 to Rs 1,372.3, registering a loss of Rs 42.4 or around 3.0%.

Meanwhile, the S&P BSE BANKEX is trading at 56,715.9 (up 0.4%). Over the last one year it has moved up from 50,325.8 to 56,715.9, registering a gain of 6,390.1 points (up 12.7%).

Overall, the S&P BSE SENSEX is up 20.3% over the year.

(To know more, you can check out historical annual results for INDUSIND BANK here and quarterly results for INDUSIND BANK here)