IndusInd Bank shares climbed 8% in 2 days; will this upmove sustain?

IndusInd Bank shares settled 2.88 per cent higher at Rs 702.40 on Wednesday. At this closing price, the crisis-hit private lender's stock has climbed 8.13 per cent in two trading days. The recent rebound came after it was reported the lender has carried out deals with private banks such as Federal Bank and ICICI Bank by transferring highly-rated corporate loans to shore up liquidity.

Before this, the bank faced multiple headwinds that clouded its near-term outlook. The key concern was a 2.35 per cent overstatement in its derivatives portfolio, stemming from long-standing internal trade accounting discrepancies.

On technical setup, an analyst said IndusInd Bank shares looked "slightly bullish" on charts after a sharp downward run. Support on the counter could be seen in the Rs 637-630 range, while a decisive close above Rs 710-730 levels may trigger further upside. In contrast, one of the analysts suggested that the stock remains a 'sell-on-rise' candidate.

"IndusInd Bank stock price is slightly bullish on daily charts with strong support at Rs 637. A daily close above the resistance of Rs 710 could lead to an upside target of Rs 810 in the near term," said Sebi-registered research analyst AR Ramachandran.

"Support will be at Rs 630 and resistance at Rs 710. A decisive move above Rs 710 level may trigger a further upside towards Rs 730. The expected trading range will be between Rs 630 and Rs 730 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

"The stock has seen a sharp downward run, driven by accounting discrepancies. It remains a 'sell-on-rise' candidate as the broader trend is still bearish. The price is trading well below all key moving averages, indicating continued weakness. Resistance is evident around Rs 748-776 levels, where supply zones are active. Momentum indicators suggest that the stock lacks strength for a sustainable recovery. Unless it reclaims key resistance levels, the downside bias is likely to persist," said Ameya Ranadive, CMT, CFTe & Senior Technical Analyst at StoxBox.

The scrip traded higher than the 5-day and 10-day simple moving averages (SMAs) but lower than the 20-day, 30-, 50-, 100-, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 37.21. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-equity (P/E) ratio of 7.57 against a price-to-book (P/B) value of 0.84. Earnings per share (EPS) stood at 92.75 with a return on equity (RoE) of 11.07. According to Trendlyne data, IndusInd Bank has a one-year beta of 1.1, indicating high volatility.

As of December 2024, promoters held a 16.29 per cent stake in the private bank.