IndusInd Bank returned to profitability in the March quarter, delivering a sharp turnaround aided by lower provisions and improving asset quality, setting the stage for a recalibration narrative that brokerages say is beginning to take shape. The lender reported a net profit of Rs 533 crore for Q4FY26, compared with a steep loss of Rs 2,236 crore a year ago, as credit costs eased materially. Asset quality metrics also showed incremental improvement, with gross NPAs moderating to 3.43% and net NPAs easing to 1%.
Brokerages broadly view the print as a step in the right direction, with several highlighting a visible 'course correction' led by lower slippages and tighter cost control. However, opinions remain divided on the sustainability of the recovery, with some flagging the need for stronger deposit growth and a clearer return trajectory.
Here's how brokerages are interpreting the Q4 performance and what they expect next.
HSBC on IndusInd Bank
- HSBC maintains a Buy rating and hikes the target price to Rs 1,100 from Rs 880.
- Q4 performance indicates a visible course correction.
- Earnings reflect gradual improvement driven by management actions.
- The brokerage raises FY27/FY28 EPS estimates by 20%/10%, factoring in stronger loan growth, better margins and lower credit costs.
Bernstein on IndusInd Bank
- Bernstein maintains an Outperform rating with a target price of Rs 1,000.
- Asset quality is showing visible improvement.
- The balance sheet is stabilising.
- Return ratios are expected to improve, led by lower credit costs.
Morgan Stanley on IndusInd Bank
- Morgan Stanley maintains an Equal-weight rating with a target price of Rs 730.
- Q4 was a good quarter with gradual improvement in profitability.
- PAT beat estimates, driven by lower provisions due to reduced slippages and credit costs.
- Core PPoP missed estimates by 4% due to weaker fee income, though partly offset by lower operating expenses.
- Balance sheet growth remained subdued.
Macquarie on IndusInd Bank
- Macquarie maintains an Underperform rating with a target price of Rs 635.
- Q4 saw improvement in RoA.
- Earnings beat estimates, largely due to lower credit costs.
- The brokerage highlights the need for stronger deposit growth.
- No capital raising is expected in FY27, and ROEs are likely to remain sub-par in the near term.
Jefferies on IndusInd Bank
- Jefferies maintains a Buy rating and hikes the target price to Rs 1,100 from Rs 1,000.
- Q4 marks a turning point, with earnings ahead of estimates.
- The beat was driven by lower credit costs and higher treasury gains.
- Leadership and board restructuring are largely complete, with execution now key.
- The brokerage expects an uptick in growth and profitability.
- Valuations remain attractive, supporting the Buy stance.
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