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IndusInd Bank shares: Nomura upgrades stock; compares it with YES Bank & RBL Bank, says this

IndusInd Bank shares: Nomura upgrades stock; compares it with YES Bank & RBL Bank, says this

Shares of IndusInd Bank surged 6 per cent on Wednesday after Nomura upgraded its rating on the private lender and increased its target price by 50 per cent.

Pawan Kumar Nahar
Pawan Kumar Nahar
  • Updated Jun 18, 2025 10:24 AM IST
IndusInd Bank shares: Nomura upgrades stock; compares it with YES Bank & RBL Bank, says thisIndusInd Bank: The crisis-hit private lender recorded a consolidated net loss of Rs 2,328.92 crore in the January-March 2025 quarter as against a profit of Rs 2,349.08 crore in the corresponding period last fiscal.

Shares of IndusInd Bank Ltd surged nearly 6 per cent during the trading session on Wednesday after the global brokerage firm Nomura upgraded its rating on the private lender and increased its target price on the counter by 50 per cent after the recent sequent of the events.

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Shares of IndusInd Bank surged 5.69 per cent to Rs 855.20 on Monday, with its market capitalization hitting Rs 67,000 crore mark. The stock had settled at Rs 809.15 on Tuesday. The stock has zoomed nearly 41 per cent from its 52-week low at Rs 605.40 hit nearly 3 months ago.

Nomura upgraded IndusInd Bank to a 'Buy' rating from 'Neutral' on Wednesday and raised its price target to Rs 1,050 from Rs 700 earlier, signaling a 50 per cent revision in its targets. The overseas brokerage firm is expecting a nearly 30 per cent upside in the Mumbai-based lender.

Explaining its rationale for the rating and target price revision, Nomura said that the board's commitment on improving the corporate governance, the ongoing search for a new leadership, and a clear intent to 'start FY26F on a clean slate' as the key positive factors.

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Reserve Bank of India (RBI) recently acknowledged IndusInd Bank's recovery efforts provide regulatory comfort. The brokerage also noted that potential approval from the RBI for the promoter to increase its stake in the bank could help ease investor concerns.

Nomura also compared IndusInd Bank's current situation to that of RBL Bank Ltd in 2021 and Yes Bank Ltd in 2018, where leadership exits were prompted by market concerns over asset quality. Near-term stock performance remained muted for these lenders, but the performance revived over the medium term as fundamentals improved, it noted.

"IndusInd Bank has taken a one-time hit of Rs 5,300 crore in 4QFY25 (8 per cent of 3QFY25 net-worth), to address the issues related to past discrepancies. Now with a new leadership, which is expected to be announced soon, we expect the bank to focus on steadying the ship over FY26F," said Nomura, which expects loan growth to be soft at 6 per cent in FY26.

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"We expect NIMs to stay muted at 3.4 per cent in FY26F led by repo cuts and elevated cost of funding, and improve to 3.6-3.7 per cent over FY27-28F. We expect credit cost to decline to 1.6-1.3 per cent over FY26- 28F, with stress moderating in the unsecured retail and MFI segments. Hence, we expect RoA and RoE to gradually improve to 1 per cent and 9 per cent by FY27F," adds Nomura.

IndusInd Bank reported a net loss of Rs 2328.92 crore in the fourth quarter of the financial year 2024-25, compared to a net profit of Rs 2,349 crore in Q4FY24. The private lender's net interest income (NII) came in at Rs 3,048.3 crore and provisions soared to Rs 2522.08 crore in Q4FY25. This was the first earnings report after the lender uncovered accounting discrepancies.

On a technical basis, Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets said that IndusInd Bank has been consolidating in a tight range for the past 20 sessions on the daily charts, reflecting a period of low volatility. The momentum indicator is positively positioned, suggesting the likelihood of an upside breakout.

"Based on this setup, investors may consider entering a buy position around Rs 825, with a stop loss placed at Rs 770. The stock is expected to move towards the target range of Rs 930–980 over the next couple of weeks," he said.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jun 18, 2025 10:24 AM IST
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