LKP Research's research report on IndusInd Bank
Following several financial reporting irregularities and the abrupt departure of its top two executives in recent months, IndusInd Bank (IIB) reported a weak operational performance, driven by significant reversals of previously recognized income and delayed recognition of asset impairments. Additionally, the bank’s business growth moderated due to a cautious approach in the corporate and MFI segments, alongside structural challenges in mobilizing deposits. Asset quality also continued to deteriorate, reflecting poor lending and collection practices. Looking ahead, we expect lower growth in retail deposits, as repeated discrepancies have raised credibility concerns, which are likely to impact loan growth in FY26E.
Outlook
Hence, with a cautious outlook, we downgrade our rating to REDUCE, valuing the stock at 0.9x FY27E BVPS with a target price of ₹737.
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