Is it the right time to enter IndusInd Bank now

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Shreenath A, Sep 11, 2020.

  1. Shreenath A

    Shreenath A New Member

    Sep 1, 2020
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    Could someone please advise whether now is a good time(Sept 2020) to enter IndusInd bank ltd(trading @ approx 610 Rs) if I am looking to hold the stock for 1 - 1.5 years, and looking at 50% profit?
  2. Michael Gonsalves

    Michael Gonsalves Member Staff Member

    Jun 26, 2016
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    The problem with Banking stocks in general, and IndusInd Bank in particular, is that the extent of NPAs likely to arise as a result of Covid-19 is as yet unknown.

    Banks and NBFCs have given large sums as loans to a number of stressed sectors including real estate.

    Recently, even Shapoorji Pallinji defaulted on Union Bank commercial paper worth Rs 200 cr.

    Also, there is large exposure to Vodafone, whose fate is as yet unknown given the problems in the Telecom sector.

    This is why IndusInd Bank has lost a large part of its market capitalisation (it is down 50% even over 5 years).

    The best solution may be to wait for clarity to emerge as to the extent of NPAs after normalcy returns.

    Alternatively, one can start buying small quantities whenever there is a dip.