Sell IndusInd Bank; target of Rs 650: ICICI Securities

ICICI Securities research report on IndusInd Bank

IndusInd Bank (IIB) reported higher-than-expected Q4FY25 loss of INR 22.4bn (RoA of -1.74%) burdened by multiple oneoffs, including derivative loss and irregularities in its MFI book while slippages/net NPA jumped QoQ. Core profitability, adjusted for one-offs, was weak too with NIM at 3.47% (down 46bps QoQ) while PPOP slipped 24% YoY to INR 30.62bn. CET 1 and LCR levels are comfortable at 15.1% and 118%, respectively. The board is yet to recommend a name for its MD&CEO position to the RBI. We continue to believe that IIB would prioritise balance sheet stability vs. growth while the path to RoA revival remains uncertain, even if it was to get a signature hire. Our estimates are broadly unchanged, but we expect a sharp EPS downgrade in consensus estimates.

Outlook

We estimate single-digit loan growth/RoE. Retain SELL; TP of INR 650 unchanged.