IndusInd Bank Multibagger Blue Chip Stock (Morgan Stanley buy recommendation)

IndusInd Bank Multibagger

Investors who are looking for a blue chip stock which can become a multibagger can consider a buy of IndusInd Bank.

Why is IndusInd Bank a blue chip stock?

IndusIndia bank has a well-diversified lending portfolio but it it’s loan share across segments is small. A widening of the portfolio, focus on cross-sell and strong trailing network expansion will help the Bank accelerate loan growth.

Since Ramesh Sobti joined as CEO in 2007-08, the Bank has gone from being a vehicle financier to having a comprehensive product portfolio across retail and corporate segments. Its profile is similar to other large private banks like HDFC Bank.

IndusInd Bank will be multibagger: Morgan Stanley

Morgan Stanley has issued a research report in which it has called the Bank a ‘Mega-cap’. The stock to double in three years time and become a mega-cap by financial year 2020.

The stock has a target price of Rs 1,600. Morgan Stanley is overweight on the stock. It expects earnings growth to accelerate and premium valuations to sustain.

Morgan Stanley expects the Bank’s low-cost deposits to increase going ahead as the bank benefits from increasing dominance with home markets and higher cross sell with vehicle finance/rural customers.

Merger of IndusInd Bank with SKS/ Bharat Financial Inclusion

There may be a merger with Bharat Financial Inclusion. The management of Bharat Financial Inclusion has said that it is looking to grow business relationship with the Bank.

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