Citi expects IndusInd Bank stock to rise up to 35% as management expects strong loan growth

So far this year, the stock of this private sector lender has declined 7 percent, underperforming 7 percent rise in the benchmark Nifty 50 index.

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26 Aug, 2025 12:21

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Global brokerage firm Citi maintained a bullish stance on IndusInd Bank stock and assigned it a target price of Rs 2,010 apiece after management reiterated confidence of growing loans by 18-20 percent over FY25-26. The brokerage firm sees over 35 percent upside from current levels.

"Growth is expected to be led by a gradual rise in retail, balanced vehicle mix, and scale-up of new businesses. A sustained traction in MFI is also expected to fuel growth going ahead," the brokerage firm noted.

IndusInd Bank expects deposits to gather pace as well, forecasting liability growth of 16-18 percent over FY25-26.

"Over FY25-26, we estimate IndusInd Bank to deliver 17 percent loan growth, see steady margins with 1.2 percent credit costs, and over 1.8 percent RoA," said analysts at Citi.

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In the March-ended quarter, IndusInd Bank profit jumped 15 percent on-year to Rs 2,349 crore, while net interest income rose by 15 percent YoY to Rs 5,376 crore.

However, net interest margin contracted to 4.26 percent in Q4FY24, as compared to 4.28 percent in the year-ago period.

Its asset-quality metrics improved during the quarter, with gross non-performing asset at 1.92 percent in Q4FY24, down from 1.98 percent in the previous quarter. Net NPA ratio, too, inched down to 0.57 percent in Q4FY24 from 0.58 percent in Q3FY24.

In terms of valuation, IndusInd Bank trades at 12.9x price-to-earnings (PE) ratio, cheaper than ICICI Bank at 17.8x PE, Axis Bank at 13.9x PE, and Kotak Mahindra Bank at 18.7x PE.

ALSO READ: Goldman Sachs reiterates bullish stance on private banks, says 'fundamentals' remain strong

Other than Citi, analysts at JM Financial also shared a 'buy' rating on IndusInd Bank following its Q4 results and put out a target price of Rs 1,900 per share.

"The stock trades at attractive valuations 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. We expect bank to deliver healthy RoA/ROE of 2.01 percent/16.9 percent by FY26E," the brokerage firm stated in an earlier note.

So far this year, the stock of this private sector lender has declined 7 percent, underperforming 7 percent rise in the benchmark Nifty 50 index.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.