Hold IndusInd Bank; target of Rs 780: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on IndusInd Bank with a target price of Rs 780 in its research report dated May 22, 2025.

Broker Research

May 23, 2025 / 13:23 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on IndusInd Bank

IIB saw an abnormal but weak quarter as it reported a net loss of Rs22.4bn due to recognition of accounting lapses. While forex loss of Rs19.6bn and interest reversal on MFI loans Rs5.7bn were expected, increased MFI stress of Rs19.7bn led to QoQ spike of 81bps in provisions to 281bps; contingent provisions of Rs13.25bn were fully utilized. Our sense is that most of the lapses have been corrected, and no significant deviations are expected. For FY26/27E we trim loan growth by 5%/2% to 8%/11% and subsequently due to cascading effect cut NII by 15%/13%. This would result in earnings cut of 31%/26% and ABV reduction of avg. 8.6%. RBI has requested proposals for new CEO appointment by 30th Jun’25; near to medium term performance would hinge on the pedigree of the prospective CEO and the respective strategy to improve governance, credibility and fundamentals.

Outlook

Stock is trading at 0.8x on Mar’27 ABV; we maintain multiple at 0.9x but cut TP to Rs780 from Rs860. Retain HOLD.

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