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IndusInd Bank stock, should you buy sell or hold

 

IndusInd Bank stock, should you buy, sell or hold


IndusInd Bank Price movement since March 2020:

IndusInd Bank Ltd is one of the fastest growing banks in the Indian private sector banking. IndusInd Bank has shown good growth in the past few years. Even IndusInd Bank share holders earned multiple returns in the stock of the IndusInd Bank since March 2020. There was lot of bad news with the IndusInd Bank when Indian market was going down due to covid 19 impact but smart investors accumulated IndusInd Bank stock at lower levels and earned  4 times multiple returns from the lower price levels of 272rs to 280rs in march 2020. After March 2020, IndusInd Bank stock has made 52 week high of 1242rs. Still IndusInd Bank stock is trading at low price from its 2018 highs nearly 2018rs. But now one question comes into the mind of the traders & investors of IndusInd Bank that should hold or sell IndusInd Bank stock? What are the price targets of IndusInd Bank stock in the coming weeks or months?  Before discuss the short term & long term price targets in IndusInd Bank stock, We will discuss little about the IndusInd Bank business model.

IndusInd Bank business model:

IndusInd Bank offers products & services which include Personal Banking deposits, loans, investments, forex services, demat services, insurance, online services as well as the wealth management services. IndusInd Bank  also offer products & services to NRI’s  &  offers mutual funds, online share trading, money transfer, investment products such as international deposits, , etc which sounds very good.  IndusInd Bank also offers property solutions and insurance loans. IF we will discuss about the IndusInd   Business banking services then it includes retail, NRI, SMEs, and other corporate's, offering spectrum of products.

IndusInd Bank stock valuation:

IndusInd Bank stock is trading with the face value of 10rs each & price to book value of 1.8. IndusInd Bank has 50 earnings  per share(eps). IndusInd Bank has book value of 555 & stock price of IndusInd Bank is trading with P/E ratio of 20.3 against the sector P/E of 32. Market cap of IndusInd Bank is 79,900 cr. All these factors looks still reasonable but these are the not only factors for calculating the valuation of IndusInd Bank stock.  If we will check the dividend history of the IndusInd Bank then bank has been offering average 6rs dividend from last 5 years.

IndusInd Bank financials:

IndusInd Bank has been showing good growth in front of revenues.  In the year ended FY 2017, total revenues of IndusInd Bank was around 14,400cr which increased in FY18, FY19 to FY21 and total revenues reached 28,990cr. Net profit in Fy17 was little ahead of 2860cr after that we had seen sudden jum in the net profit of the bank and it reached to 4418cr in the FY20. But in FY 21, IndusInd Bank net profit decreased and reaches at 2836cr. The decrease in the net profit in fy21 was expected due to covid19 impact but still IndusInd Bank management handled the situation very well. In the banking sector, NPA’s play very important role. If we will track the past NPA’s data of IndusInd Bank then gross NPA of bank is 2.7% in Sept 2021 qtr which is less as compared with June 2021 qtr which was 2.88%. Net NPA of IndusInd Bank is at 0.8% in Sep2021 qtr. There is no question the IndusInd Bank has show steady growth in the past few qtrs.

 Should you buy or sell IndusInd Bank stock?

As we have discussed above that IndusInd Bank has show good improvement in the net profit & in NPA’s as well but stock price of IndusInd Bank @1032rs (Closing price of 10th-november-2021), It looks over valued for the short term point of view. For the long term investors it is a good bank to keep into the portfolio but according to our research long term targets in IndusInd Bank stock has already met.  Long term investors should wait for the correction in IndusInd Bank stock for start investing into the stock. Stock has already given multiple returns in the past 18 months therefore profit booking on higher levels was expected. This is the reason we had seen correction the IndusInd Bank stock which was nearly 210rs per share.  New Investors should buy IndusInd Bank stock only if stock gives closing above 1085rs otherwise for short term avoid buying in IndusInd Bank stock. Try to accumulate the stock after 8% to 10% correction in the stock.

Should you sell IndusInd Bank stock for short term trading?

Short term targets of IndusInd Bank stock

As of now IndusInd Bank looks in the profit booking mode. IndusInd Bank stock has strong support around 995rs & current closing price of IndusInd Bank stock is 1032rs. There if traders want to create short sell position into IndusInd Bank stock then 1068rs will be the strict stoploss on closing basis & lower level price targts of IndusInd Bank will be 1020rs, 1010rs, 998rs , 995rs. If IndusInd Bank stock breaks the level of 995rs or 92rs and gives closing below these levels then more down side will be opened in IndusInd Bank stock & short term price targets of IndusInd Bank will be 982rs, 975rs, 965rs, and 958rs. 955rs to 958rs is another strong support level in IndusInd Bank stock. We may see bounce back from these levels. In any case IndusInd Bank stock break 958rs then it can take the stock price of IndusInd Bank up to 925rs or below.

At what price traders and investors should buy IndusInd Bank stock?

We had already discussed that new buying in the IndusInd Bank stock is only above 1085rs. If in the coming days IndusInd Bank stock gives close above 1085rs with strong volumes then we may see short term trading targets in IndusInd Bank stock up to 1100rs, 1120rs, 1135rs, 1148rs, 1158rs, 1165rs. In this case if IndusInd Bank stock gives close above 1170rs price levels then we will see another round of upside into the stock which will take IndusInd Bank stock price upto 1190rs, 1200rs, 1218rs, 1224rs, 1235rs+ or new 52 week highs.

Must note:

On the technical charts IndusInd Bank stock looks under selling pressure for short term therefore buying is not recommended until stock does not give few closings above 1085rs.

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