IndusInd Bank shares tank 3% as Goldman Sachs downgrades stock to 'Sell'; key details

Shares of IndusInd Bank Ltd dropped over 3 per cent in Wednesday's trade after foreign brokerage Goldman Sachs downgraded its rating on the stock to 'Sell' from 'Neutral', calling it a structurally weak franchise, with return on asset (RoA) expected to reset to the lower levels. 

The brokerage suggested a revised target price of Rs 722 against Rs 634 earlier on the IndusInd Bank stock and said the private lender might command a weaker growth profile even post normalisation of its trajectory in the second half of the ongoing financial year and in FY27, CNBC TV18 reported. 

Shares of IndusInd Bank fell 3.45 per cent to hit a low of Rs 849 on BSE today. The stock has rebounded 21 per cent in the past one month against 8.24 per cent rise in the BSE Bankex during the same period. Despite this, the stock is down 12 per cent in 2025 and 40 per cent in the past one year. A Reuters report suggested that the bank has submitted a shortlist of three senior bankers to the Reserve Bank of India (RBI) for consideration as its next chief executive officer. They included Rajiv Anand, Rahul Shukla, and Anup Saha — all experienced financial sector leaders.

In April this year, the lender's MD & CEO Sumant Kathpalia resigned, a day after Deputy CEO Arun Khurana's resignation, in relation to the accounting discrepancies seen in the derivatives  portfolio. The bank later reported higher-than-expected losses for the March quarter due to accounting discrepancies, a fraud detected over the past few months and higher slippages in the microfinance business. The one-offs in the quarter were higher than previously disclosed.

Goldman Sachs has reportedly reduced its earnings per share estimates for FY26 by 25 per cent and FY27 by 17 per cent, saying, the stock valuation may stay below book value on poor earnings visibility.

Antique Stock Broking has a 'Hold' rating on the stock with a target price of Rs 880. Kotak has a reduce on the stock. It finds the stock worth Rs 800. 

Earlier, IIFL Securities said its June quarter profit after tax (PAT) estimates for banks including IndusInd Bank (IIB), Federal Bank, Axis Bank and ICICI Bank are 5-18 per cent below the consensus estimates. It sees IndusInd Bank's Q1 profit falling 66 per cent YoY to Rs 700 crore and NII  21 per cent to Rs 4,300 crore. Core PPoP is seen at Rs 2,100 crore, down 46 per cent.