Should you buy, sell, or hold IndusInd Bank’s stock? Here’s what analysts say:Jefferies
Jefferies has maintained a ‘Buy’ rating on IndusInd Bank but has reduced the target price from Rs 1,750 to Rs 1,470. This decision comes in light of weaker asset quality and contingent provisions, which have negatively impacted profits. Additionally, the bank’s topline has been affected by softer lending activity. Jefferies expects this pressure to continue in the second half of FY25, with moderation anticipated in FY 26-27, leading to an estimated earnings cut of 13-25%.
Nomura
Nomura has maintained a ‘Neutral’ rating on IndusInd Bank while lowering the target price to Rs 1,220 from Rs 1,580. The bank has experienced a weak quarter and is facing a challenging outlook. Nomura expects IndusInd Bank to deliver a Return on Equity (RoE) of 11-13% over FY25-27F, down from the previously expected ~14%. Earnings per share (EPS) for FY25-27F have been cut by 22-14%, driven by softer loan and deposit growth, along with lower Net Interest Margins (NIMs) and fees.
Additionally, near-term triggers are absent due to the bank’s challenging asset quality outlook.
Investec
Investec has maintained a ‘Hold’ rating on IndusInd Bank, cutting the target price to Rs 1,410 from Rs 1,560. The report notes that the bank is “kitchen-sinking” ahead of the RBI’s CEO decision, and it may take at least a few more quarters for the bank’s fundamentals to improve. Weaker growth in the Microfinance Institution (MFI) sector and stress in credit cards have led to lower Net Interest Margins (NIMs) and fee income.
The next major trigger for the bank is the CEO decision from the Reserve Bank of India (RBI).
Nuvama
Nuvama has downgraded IndusInd Bank from ‘Buy’ to ‘Hold’ and cut the target price to Rs 1,290 from Rs 1,690. The downgrade is driven by deteriorating asset quality, with the 30-day past due (30DPD) rate in the microfinance institution (MFI) sector increasing to 4% from 2% quarter-on-quarter (QoQ).
Additionally, the bank’s Net Interest Income (NII) has decreased QoQ, and fees remain weak. There is also an upside risk to the bank’s guidance.
IIFL
IIFL has downgraded IndusInd Bank’s rating to ‘Add’ from ‘Buy’ and slashed the target price to Rs 1,300 from Rs 1,590. The downgrade is based on a miss across key performance metrics, with a sharp decline in Net Interest Margins (NIM) driven by slower growth in high-yielding segments.
Asset quality has deteriorated across various segments, and the bank is expected to face elevated credit costs in the near term due to forward flows. IIFL has also reduced its FY26-27 estimates by 9-14%, citing lower growth and fee income.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
