The share price of IndusInd Bank is in the spotlight today after the lender posted a sharp drop in its Q1FY26 earnings. While the numbers came in slightly better than estimates, the steep year-on-year decline in profit, slower loan growth, and rising provisions have raised concerns among investors.
Brokerages remain cautious, with mixed views on the stock’s future direction. Let’s take look at what the brokerages say on the stock –
Motilal Oswal: Neutral view, but cautious tone
The brokerage firm Motilal Oswal maintained a ‘Neutral’ stance on the stock with a target price of Rs 83. This offers a limited 3% upside from current levels. The brokerage highlighted that the bank returned to profitability after previous one-offs but flagged multiple concerns.
“We slightly raise our earnings estimates by 2.6%/2.3% for FY26/27 as the bank is focusing on containing costs and is adopting a profitability-first approach,” the firm said.
It also noted that asset quality deteriorated, primarily due to stress in the MFI segment, and expects it to take six months to stabilise. The bank’s RoA and RoE for FY27 are projected at 0.7% and 6.4%, respectively.
“The appointment of a new CEO and the pace of business recovery will be the key near-term monitorables,” the brokerage added.
Nuvama: Reduce rating with sharp cut in estimates
On the other hand, Nuvama Institutional Equities maintained a ‘Reduce’ rating on the stock, setting a target price of Rs 600, citing significant weakness in the bank’s core performance.
The firm noted, “Q1FY26 is the new base…core PPOP plunged 47% YoY/32% QoQ. RoA slid to 45bp from 103bp in Q3FY25 and 168bp YoY. We see the risk-reward as unfavourable.”
Nuvama also pointed to falling loan disbursals, especially in microfinance and corporate segments, along with a 35% YoY crash in fee income and a sharp decline across all revenue lines.
It added that reported numbers were partly cushioned by trading gains, but core performance remained under strain. The core net interest margin (NIM) stood at 3.35%, a continued decline from 4.25% a year ago.
HDFC Securities on IndusInd Bank
HDFC Securities believes it is going to be a long grind for IndusInd Bank towards regaining stakeholder confidence. They are maintaining a Reduce with the target price unchanged at Rs 665 per share.
The bank’s credit costs were elevated despite minimal write-offs. The bank is currently challenged with a succession overhang coupled with multiple senior management exits, while simultaneously addressing handicaps around accounting lapses, sub-par deposit franchise and stress in the unsecured book.
Despite deposits de-growing 3% QoQ, the bank’s CASA ratio dropped further to 31.5% as seasonality in CA balances normalized. According to the brokerage house, the “forecasts build in single-digit loan CAGR and muted return ratios over the medium-term, as we believe that IIB needs to undergo a complete overhaul under greater regulatory scrutiny to regain stakeholder credibility, which is likely to be a long grind.”
Earnings snapshot: Profit falls sharply
IndusInd Bank reported a 68% drop in standalone net profit at Rs 684 crore for the quarter ended June 30, 2025, compared to Rs 2,101 crore a year ago. On a consolidated basis, net profit came in even lower at Rs 604 crore, down 72% YoY, as per the investor presentation.
Net interest income (NII) declined 14% YoY to Rs 4,640 crore, and asset quality remained under pressure due to rising provisions especially particularly in the retail commercial vehicle segment.