IndusInd Bank’s stock opened lower Thursday, reacting to the lender’s first quarterly net loss in nearly 20 years. But buyers soon stepped in, pushing shares back up as investors pinned hopes on new leadership and attractive valuations. The private sector bank’s future now hinges on how soon clarity arrives on its next CEO and how it navigates recent accounting issues.
Mixed Analyst Views Reflect Unease and Opportunity
Out of 45 analysts tracking IndusInd Bank, opinions are sharply divided. Fourteen recommend buying the stock, sixteen suggest holding, while fifteen advise selling. This split highlights deep uncertainty in the market.
A bunch of brokerages are taking a cautious stance. UBS rates the stock as a “sell,” citing lack of clear strategy and weak balance sheet growth. They slapped a price target of ₹600 on the shares, which closed near that level on Wednesday. HSBC joined in with a downgrade to “reduce” and lowered its price target to ₹660. Their view? The bank’s stuck in a pre-2009 kind of mess with no clear path to rebuild.
HSBC also chopped earnings per share (EPS) estimates drastically—down by around 40% for both FY26 and FY27. The culprit: management’s one-off accounting corrections, which raised red flags.
CLSA remains neutral with a “hold” rating but trimmed its price target to ₹725, signaling caution but not panic. Meanwhile, Nuvama stuck with “reduce” and pegged their target at ₹600, warning about retail deposit uncertainties and the need for high liquidity, which could squeeze net interest margins.
Then there’s Jefferies, which is still optimistic with a “buy” call, though they cut their target to ₹920. They expect growth and profitability to stay muted for FY26 but see a recovery afterward. Jefferies believes current valuations somewhat factor in the risks.
The star optimist here is Macquarie, which sees up to 60% upside with an “outperform” rating and a price target at ₹1,210. They like the cheap valuations but admit asset quality worries remain. Key points to watch include CEO succession, peak credit costs, stable margins, and governance.
-
Summary of analyst ratings and price targets:
| Broker | Rating | Price Target (₹) | Notes |
|---|---|---|---|
| UBS | Sell | 600 | Strategic uncertainty, margin worries |
| HSBC | Reduce | 660 | Pre-2009 outlook, accounting issues |
| CLSA | Hold | 725 | Cautious, trimmed earnings estimates |
| Nuvama | Reduce | 600 | Deposit visibility concerns |
| Jefferies | Buy | 920 | Recovery expected post FY26 |
| Macquarie | Outperform | 1210 | Valuation attractive, asset quality a risk |
The Weight of the First Net Loss in Two Decades
IndusInd Bank reported its first quarterly net loss since early 2000s, rattling investor confidence. The Mumbai-based bank faced one-off hits due to accounting corrections that uncovered discrepancies, prompting management to take corrective action.
This loss isn’t just a number. It shakes the foundation of trust investors had, especially since IndusInd was seen as a steady grower. The drop of up to 5% in early trading reflected jitters. Yet, the bounce back shows some faith remains—maybe in the hope that new leadership will steer the bank through this rough patch.
The Reserve Bank of India’s request for the names of MD & CEO candidates by June 30 adds urgency. Investors are keen to see if the incoming chief can provide clear strategic direction, restore growth momentum, and improve governance.
Liquidity and Margins: The Twin Challenges Ahead
One major concern is the bank’s liquidity stance. The recent revelations about accounting issues and deposit uncertainties mean IndusInd will likely need to keep higher liquidity buffers. That usually weighs on profitability.
Net interest margins (NIMs), the difference between lending and borrowing costs, could come under pressure if the bank has to hold more liquid assets that yield less. Nuvama’s downgrade reflects this, noting visibility on retail deposits remains “low,” which makes forecasting tricky.
The management’s cautious tone about FY26 and FY27 earnings reflects these worries. Brokerage cutbacks on profit estimates range from 28% to over 40%. That’s significant.
Yet, some believe these concerns are largely priced in. The lower valuations compared to peers make the stock attractive if the bank can fix governance and stabilize credit costs.
What Investors Are Watching Next
Here’s what traders and analysts say they’ll keep an eye on:
-
RBI’s decision on the new MD & CEO candidate by end of June.
-
The bank’s strategy to rebuild growth and restore confidence.
-
Credit cost trends, especially whether bad loans have peaked.
-
Sustaining net interest margins amid liquidity requirements.
-
Governance improvements following accounting issues.
Shares of IndusInd Bank have lost about 3% in the last month, with volatility likely to persist as clarity unfolds. The market’s divided sentiment reflects the tightrope the bank is walking — between risk and potential rebound.
It’s a tense moment for the lender, but one thing’s for sure: investors will be watching every move, every word, hoping this bruised giant finds its footing again soon.
