The IndusInd Bank shares rose 2.6% to an intra-day high of Rs 770.65 on the National Stock Exchange. The uptick in the banking stock came after it posted its quarterly earnings for Q2 FY26. The bank has been mired in controversy and concerns about accounting discrepancies for the better part of this year. As it starts the revival process, brokerages weigh in on the near-term challenges and return prospects
Nuvama on IndusInd Bank
Nuvama Institutional Equities maintained its ‘Sell’ rating on IndusInd Bank. The brokerage has a target price of Rs 600, implying a downside of another 20% in the banking stock. The loss was driven by an accelerated write-off in MFI and weak loan growth. Savings decline continues with Savings Accounts (SA) down 4% QoQ and 8% YoY.
“We believe RoA is unlikely to reach 1% through FY27E, provisions are likely to remain elevated to reduce NNPL and consolidation in growth would continue in the near term. As such, we see the risk-reward as unfavourable. The new CEO will unveil the three-year plan soon. His medium-term objective is to take RoA to 1%,” said Nuvama.
Jefferies on IndusInd Bank
Meanwhile, Jefferies is staying with a Buy call on the bank. They have a target price of Rs 920 per share. This implies nearly 22% upside from current levels. According to the brokerage house, though Q2 slippages stayed elevated at 2.8% of past year loans, it was largely due to higher-than-normal slippages from the MFI segment that formed 43% of the total, and there weren’t any clean-up-related NPLs. However, the bank made accelerated write-offs during the quarter that lifted credit costs to 3.1% of average loans and pushed the bank into losses. Overall gross NPL is at 3.6% of loans, and net NPL is at 1%. They expect the bank to reach a return on assets of 0.7% in FY27.
Elara Capital on IndusInd Bank
Elara Capital has reiterated a Sell rating on the stock, with a target price of Rs 720, looking at a downside of 4% from the current levels. The brokerage stated that it will watch for a period of stability, which will probably take time and would render volatile outcomes at various stages.
“Today, a lot is left unanswered to essentially call for potential bottoming. We await the enunciation of strategic directions by new management, and it is difficult to take a constructive call on the bank amid uncertainties, regardless of valuation,” said Elara Capital.
IndusInd Bank reported a loss of Rs 450 crore in Q2 FY26, with the bank resorting to higher write-offs, an issue that is yet to be settled.
IndusInd Bank stock performance
The share price of IndusInd Bank has risen 1.3% in the last five trading sessions. The stock has given a return of 4.33 % the last one month. However, the stock has fallen 7.5% in the past six months and erased over 41% of investors’ wealth in the last one year.