IndusInd Bank shares fall 2% post Q4 results. Should you buy, sell or hold?

Private sector lender reported a 15% year-on-year (YoY) jump in its March quarter net profit at Rs 2,347 crore, which was higher than the Street estimate of Rs 2,041 crore. Its net interest income or NII rose 13.9% to Rs 5,376 crore during the quarter.

The lender’s provisions were down 3.8% quarter-on-quarter (QoQ) to Rs 899 crore while its gross NPA and net NPA ratios improved to 1.92% and 0.57% from 1.98% and 0.59% YoY respectively and PCR at 71% in Q4.

Its net interest margin (NIM) stood at 4.26% compared to 4.28% for Q4 FY23 and 4.29% for Q3 FY24.

During the quarter, IndusInd’s deposits were Rs 3,84,586 crore against Rs 3,36,120 crore, an increase of 14% YoY. CASA deposits increased to Rs 1,45,666 crore with Current Account deposits at Rs 46,989 crore and Savings Account deposits at Rs 98,676 crore. CASA deposits comprised 38% of total deposits as of March-end.

Also Read: Goldman Sachs raises Zomato’s target price to Rs 240; stock jumps 3%Should you buy, sell or hold IndusInd Bank’s stock? Here’s what analysts say:JM Financial
JM Financial maintained its Buy rating on IndusInd Bank with a target price of Rs 1,900.

“Despite an increasing interest rate environment, IIB has managed to adroitly protect its margins and profitability on the back of its diversification and retailisation efforts. Stock trades at attractive valuations of 1.4x P/B FY26E (for expected RoEs of 17% FY26e) and as the bank continues to invest in technology and increasingly focus on granularity, we believe it remains well-positioned for sustained growth across product cycles,” it said.

Motilal Oswal
Motilal Oswal reiterated its Buy rating on IndusInd Bank with a target price of Rs 1,850.

IIB reported an in-line performance, led by healthy income growth and controlled provisions. The management has guided for loan growth of 18- 23% over FY23-26. Healthy provisioning in the MFI portfolio and moderation in the overall slippage run rate will keep credit cost under control.

Additionally, the presence of a contingent provisioning buffer of 0.29% of loans provides comfort. IIB is well positioned to benefit on margins as and when the rate cycle turns.

Kotak Institutional Equities
Kotak Institutional Equities retained its Buy rating on IndusInd Bank with a target price of Rs 1,800.

“NIM has been stable despite a sharp increase in cost of funds through the entire upward movement in interest rates. Importantly, IIB has delivered an excellent price appreciation in the past year while interest rates were going higher,” Kotak said.

For a re-rating with frontline banks, we do believe that the bank should demonstrate a sustainable improvement in liability mix—which in our view is still a few years away, it said.

InCred Equities
InCred Equities maintained its Hold rating on IndusInd Bank with a lower target price of Rs of Rs 1,650.

“We are factoring in ~11.6% CAGR in PAT over FY24-27F amid declining margins and increasing credit costs. We see limited upside from the current levels. We maintain HOLD rating on the stock with a lower target price of Rs 1,650 or ~1.6X FY26F BV, which factors in all the bank’s achievements & there is absence of a favourable risk-reward ratio,” it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)