INDUSIND BANK 2021-22 Annual Report Analysis

Thu, 31 Mar

INDUSIND BANK has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the bank during the year 2021-22.

INDUSIND BANK Income Statement Analysis

• Interest income during the year rose 6.3% on a year-on-year (YoY) basis.
• Interest expenses were up by 2.3% YoY during the same period.
• Operating expenses increased by 14.1% YoY during the year.
• The bank's net interest income (NII) increased by 10.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 4.8% in FY22 as against 4.8% in FY21.
• Other income increased by 13.9% YoY during the year.
• Net profit for the year increased by 64.0% YoY.
• Net profit margins during the year increased to 15.6% in FY22 from 10.1% in FY21.

INDUSIND BANK Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	289,998	308,224	6.3%
Other Income	Rs m	65,009	74,076	13.9%
Interest Expense	Rs m	154,719	158,216	2.3%
Net Interest Income	Rs m	135,279	150,008	10.9%
Operating Expense	Rs m	81,568	93,107	14.1%
Pre-provision Operating Profit	Rs m	118,719	130,978	10.3%
Provisions & Contingencies	Rs m	89,421	82,931	-7.3%
Profit before tax	Rs m	39,294	64,328	63.7%
Tax	Rs m	9,995	16,282	62.9%
Profit after tax	Rs m	29,301	48,050	64.0%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	4.8	4.8
Net profit margin	%	10.1	15.6

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INDUSIND BANK Balance Sheet Analysis

• The bank's deposits during FY22 stood at Rs 2,933.5 bn as compared to Rs 2,558.7 bn in FY21, thereby witnessing an increase of 14.6%.
• Advances for the year stood at Rs 2,390.5 bn as compared to Rs 2,126.0 bn during FY21, a rise of 12.4%.
• Cost of deposits for INDUSIND BANK fell 5.4% and stood at 4.2%, while yield on advances fell to 10.5%.
• The lender's investments rose to Rs 709.3 bn during the year from Rs 696.5 bn in FY21.
• Borrowing stood at Rs 473.2 bn, a fall of 7.8% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 4,019.7 bn as against Rs 3,629.0 bn during FY21, thereby witnessing a rise of 10.8%.

INDUSIND BANK Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	434,952	480,103	10.4%
Advances	Rs m	2,125,954	2,390,515	12.4%
Deposits	Rs m	2,558,701	2,933,495	14.6%
Yield on advances	%	11.3	10.5
Cost of Deposits	%	4.5	4.2
Investments	Rs m	696,534	709,299	1.8%
Borrowings	Rs m	513,228	473,232	-7.8%
Total Assets	Rs m	3,629,033	4,019,674	10.8%

Current Valuations for INDUSIND BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 62.0, an improvement from the EPS of Rs 37.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,126.3, stands at 16.5 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.8 times, while the price to income ratio stands at 2.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	375.0	397.9
Earnings per share (Unadj.)	Rs	37.9	62.0
Diluted earnings per share	Rs	37.8	61.9
Avg P/E ratio	Rs	18.9	16.5
Avg P/ABV ratio	Rs	1.6	1.8
Avg Market Cap	Rs	552,807	795,172
Dividends per share (Unadj.)	Rs	5.00	8.50

Ratio Analysis for INDUSIND BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 81.5x during FY22, from 83.1x during FY21. 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 increased and stood at 7.10x during FY22, from 7.06x during FY21. 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 18.4% as on 31 March 2022 as compared to 17.4% 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 10.0% during FY22, from 6.7% during FY21. 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 1.20% during FY22, from 0.81% during FY21. 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 10.33% during FY22, from 8.35% during FY21. 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 2.3% as of 31 March 2022 compared to 2.7% 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 2022. This compared with 0.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	83.1	81.5
Debt to Equity Ratio	x	7.1	7.1
Loans / Deposits	x	0.2	0.2
Capital Adequacy Ratio	%	17.4	18.4
Return on Equity	%	6.7	10.0
Return on Assets	%	0.8	1.2
Return on Capital Employed	%	8.3	10.3
% of Gross NPAs	%	2.7	2.3
% of Net NPAs	%	0.7	0.6
Yield on Advances	x	11.3	10.5
Yield on Investments	x	7.7	6.6

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 up from Rs 903.0 to Rs 1,126.3, registering a gain of Rs 223.3 or around 24.7%.

Meanwhile, the S&P BSE BANKEX is trading at 46,701.0 (up 2.1%). Over the last one year it has moved up from 39,542.9 to 46,701.0, registering a gain of 7,158.2 points (up 18.1%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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

Read: Latest Annual Report Analysis of INDUSIND BANK