Company Name: IndusInd Bank CMP: Rs 1,147 Market cap: Rs 88,978 crore Banks are in a sweet spot as a multitude of factors are helping them improve the return on assets (RoAs). On the one hand, proactive recognition, bounded stress pool, reasonable buffer, and strong capital position place banks in a structurally better space. On the other, given cyclical tailwinds at play, improving loan growth, better net interest margin (NIM) and lower credit costs are helping banks deliver strong earnings growth with better RoAs. In this context, banks have seen some re-rating, which we expect to sustain as operational dominance rises. While most banks have already been re-rated, Induslnd is a little late to catch up. That's because it has underperformed the broader market (flat on a three-month basis) and still trades at more than 20 per cent discount to its five-year average multiples (in contrast to other top frontline private banks). There are essentially three concerns here: a) impact of rising deposit cost on relatively weaker liability franchise leading to NIM pressure; b) the Reserve Bank...