IndusInd Bank’s stock surged nearly 5% after the bank
reported strong loan and deposit growth for the July-September quarter,
boosting the investor sentiment.

The bank said its loans and advances surged 18% year-on-year and 5%
quarter-on-quarter, beating most peers. Net advances picked up and grew 17% to
Rs 2,59,647 crore as of September from Rs 2,20,808 crore in the year-ago
period.

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Deposits with the bank increased 15% year-on-year from Rs
2,75,473 crore to Rs 3,15,824 crore as of September 2022. It was a 4% quarterly
increase, the lender said.

As of 2.03 pm, the stock was trading 4.80% higher at Rs
1,211.55 on the BSE. The stock was the top gainer on the index today. IndusInd
Bank’s shares are now hovering near their 52-week highs of Rs 1,275.80 per
share seen on September 20. Considering Tuesday’s gains, IndusInd’s shares have
risen nearly 30% so far in the financial year 2023.

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“Retail deposits and deposits from small business customers
amounted to Rs 1,29,895 crore as of September 30 as against Rs 1,24,102 crore
as of June 30,” the lender said in a regulatory filing.

CASA Ratio, which is the ratio of deposits in a current
account and savings account to the total deposits of the bank, also improved to
42.4% from 42.1% in the year-ago period.

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“IndusInd Bank (IIB) continues to report a strong pickup in
loan growth and we expect these trends to remain healthy which is likely to
support margins. Deposit franchise too is growing strongly, with a sustained
focus in ramping up of Retail deposits,” said brokerage and research firm
Motilal Oswal with a Buy rating.

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The broker also said that improvements in asset quality,
particularly in the MFI/Restructuring book, and commercial vehicle demand
outlook will be key monitorable.

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Further, a decline in credit costs should also help
earnings performance. Given the sharp appreciation in IndusInd stock, investors
seem to be factoring in a good chunk of the optimism into the price.