CLSA has maintained an Outperform rating on IndusInd Bank and Bandhan Bank, citing lower stress levels compared to peers in the microfinance segment. The brokerage has set a target price of ₹1,300 for IndusInd Bank and ₹220 for Bandhan Bank.
Key takeaways from CLSA’s report:
IndusInd Bank and Bandhan Bank’s stress levels are lower than other players in the microfinance space.
The overall hit in the loan book is estimated at 7-8% in this credit cycle.
Gross slippage ratio remains meaningfully lower for both banks, indicating better asset quality management.
Credit costs could remain elevated for one to two more quarters before normalizing.
Other microfinance players could face larger write-offs, driven by collection efficiency challenges and slippage trends.
CLSA’s outlook highlights the resilience of IndusInd Bank and Bandhan Bank in the microfinance sector, with manageable asset quality concerns and a potential recovery in coming quarters.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research before making any investment decisions.