Buy IndusInd Bank; target of Rs 1850 Sharekhan

Sharekhan's research report on IndusInd Bank

The bank is likely to outpace the sector in terms of earnings growth, led by stable margins, strong loan growth visibility and further improvement in credit costs. Key focus is on strengthening the franchise and delivering sustained healthy RoA/RoE trajectory with lower RWA growth. The stock trades at 1.7x/1.4x its BV estimates for FY2025E/FY2026E vs. avg RoA trajectory expected at ~2.0% over the next two years. We have added FY26E numbers and have roll forward our valuations to FY26E.

Outlook

We maintain a Buy on IndusInd Bank (IIB) with a revised PT of Rs. 1,850. The stock has re-rated itself closer to frontline banks and we expect further re-rating to occur given sustained earnings progression and strengthening of the liability franchise.

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