IndusInd Bank Ltd. share price target

We upgrade IndusInd Bank (IIB) to BUY from Reduce while hoisting our TP by ~38% to Rs1,100 from Rs800. This is on the back of reinforced confidence on the new management’s decisive push on fixing structural gaps—reorienting the asset-liability mix, strengthening governance/internal controls, and rebuilding leadership, thus setting the stage for a sustained turnaround.

IndusInd Bank reported a weak Q3 FY26 performance, impacted by balance sheet right-sizing, elevated credit costs and pressure on core profitability. Advances and deposits declined ~3% QoQ and ~1% QoQ, respectively, driven by the deliberate run-down of bulk deposits as the bank pivots toward a granular retail liability franchise. NII stood at 4,562 crore (+3% QoQ) on stable margins, while PPOP rose 11% QoQ to 2,270 crore aided by cost optimisation; however, high provisions of ~2,096 crore continued to weigh on earnings, resulting in PAT of 128 crore (vs loss in Q2 FY26). Asset quality showed early stabilisation, with...

The bank has a strong presence with pan India branch network of 3,120 branches (3,063 ATMs) and a large customer base of ~4.2 crore Q3FY26 performance: IndusInd Bank reported a modest sequential recovery in Q3FY26, aided by margin expansion and lower provisioning, though balance sheet growth remained muted. Advances declined to 3.17 lakh crore down 13.5% YoY (2.6% QoQ) and deposits to 3.93 lakh crore down 3.8% YoY (1.1% QoQ). NII declined 12.7% YoY (3.5% QoQ) to 4,562 crore, supported by improvement in reported NIM to 3.52% down 41 bps YoY (+20 bps QoQ; normalized 3.35%) driven...

IndusInd Bank (IIB) reported 3QFY26 PAT of INR1.3b (in line with our estimate of INR1.3b profit) amid better NII, offset by accelerated provisions. NII declined 13% YoY (up 3.5% QoQ) to INR45.6b (6% beat).

IndusInd Bank is undergoing a strategic recalibration under new leadership, balancing near-term prudence with medium-term growth ambitions.

Profitability metrics severely impacted, driven by accelerated provisions on MFI book

About the stock: IndusInd Bank is a Hinduja group promoted newer age private sector bank and is the fifth largest private bank in India. The bank has full product suite with strong moat in vehicle and micro finance business. The bank has a strong presence with pan India branch network of 3,116...

IndusInd Bank (IIB) reported 2QFY26 loss of ~INR4.4b (vs. our estimated profit of INR3.1b), owing to accelerated provisions on MFI and write-offs.

IndusInd Bank recorded subdued financial results in Q1FY26. However, it *over or under performance to benchmark index demonstrated resilience as it returned to profitability and its core operations stabilised. It is also aiming for a consistent and predictable improvement in financial metrics every quarter. Leadership transition remains on track, with CEO recommendations submitted for regulatory approval. Demand for vehicle loans continues to hold steady, supported by recovery in rural markets driven by a strong monsoon season and increased government spending on infrastructure. The bank's...

IndusInd Bank's asset quality deteriorate further with GNPA in consumer banking segment inch up to 4.7% vs 4.1% QoQ. MFI portfolio which remains key concern segment reported rise in GNPA (@16% vs 13% QoQ). Credit growth de-grew by 4% YoY (down 3% QoQ); similarly deposit growth de-grew by 3% QoQ. MFI portfolio de-grew by 5% QoQ along with sequential decline in corporate book resulting in 6% QoQ decline in loan growth. We have revised down the credit growth to 8% CAGR (FY25-27) vs 11% earlier. NIMs remain flat at 3.5% vs 3.5% QoQ (if adjusted for one-offs during Q4FY25). Bank reported profit of Rs.6bn vs loss last...

Focus areas to rebuild investors' confidence; leadership transition underway

IIB saw an abnormal but weak quarter as it reported a net loss of Rs22.4bn due to recognition of accounting lapses. While forex loss of Rs19.6bn and interest reversal on MFI loans Rs5.7bn were expected, increased MFI stress of Rs19.7bn led to QoQ spike of 81bps in provisions to 281bps; contingent provisions of Rs13.25bn were fully utilized. Our sense is that most of the lapses have been corrected, and no significant deviations are expected. For FY26/27E we trim loan growth by 5%/2% to 8%/11% and subsequently due to cascading effect...

IndusInd Bank (IIB) reported higher-than-expected Q4FY25 loss of INR 22.4bn (RoA of -1.74%) burdened by multiple oneoffs, including derivative loss and irregularities in its MFI book while slippages/net NPA jumped QoQ.

IndusInd Bank (IIB) reported a loss of INR23.3b (vs our est. of INR1.4b loss), led by muted NII (interest reversal of INR6.7b and higherslippages) and tepid other income amid the reversal of derivative loss of INR19.6b.

We downgrade IIB to REDUCE from Add, cutting our TP by 9.4% to Rs725 (from Rs800). This is in view of the spate of top management resignations, including the MD & CEO, which should increase business/margin disruption including risk of another round of deposit run-down, impact on asset quality, middlemanagement attrition, and possibility of appointment of an RBI nominee on the Board as well as a PSU banker as MD & CEO (similar to Bandhan/RBL).

Strategic and Operational Headwinds in Focus

IndusInd Bank reported discrepancies in its derivative portfolio pertaining to transactions done over the past 7-8 years. During the internal review of the trade book in derivative portfolio in October 2024, the bank found some discrepancies.