The Q4FY26 numbers mark a decisive return to form after a loss-making second quarter, with the bank’s performance now pointing to what analysts are calling a gradual recovery. Profitability improved ahead of estimates, driven largely by a sharp fall in provisions, even as operating performance remained soft.
Jefferies lifts IndusInd target price to Rs 1,100
Jefferies, maintaining its Buy rating, raised its price target to Rs 1,100 from Rs 1,000, rolling it forward on 1.2x June 2028 adjusted book value. “IIB’s performance in the March quarter is encouraging, with earnings ahead of estimates aided by lower credit costs and higher treasury gains,” the brokerage said, noting that the leadership team and board resets are “largely done.”It raised FY27-28 earnings forecasts to factor in better momentum, flagging return on equity of 7% by FY28 and calling valuations at 1x FY27 adjusted book “attractive.”
HSBC also moved to Buy with a target of Rs 1,100, lifting FY27 and FY28 EPS estimates by 20% and 10%, respectively, citing stronger loan growth, better margins, and lower credit costs. It pointed to four key positives: a significant reduction in gross and net slippages and write-offs; a pickup in disbursements across vehicles, microfinance, affordable housing, and SME, along with a rationalisation of low-yielding corporate loans; near-completion of top management hiring; and the appointment of two Executive Directors and two Independent Directors to strengthen the board.
Bernstein, with an Outperform rating and a target of Rs 1,000, said the quarter “reflected early but visible signs of stabilisation” across asset quality, balance sheet trends, and profitability. A sharp decline in slippages and credit costs provided meaningful earnings support, while deposit growth turned positive and the contraction in advances remained contained. The brokerage noted that management retained its medium-term guidance on loan growth, asset quality, and profitability, suggesting “confidence in a steady recovery path rather than a sharp turnaround.”
Motilal Oswal reiterated Neutral with a revised target of Rs 950, noting a “decent quarter” supported by stronger net interest income and sharply lower-than-expected provisions. It flagged modest business growth, reflecting a de-bulking of the corporate book and a strategic shift towards the mid-market.
The brokerage projects return on assets of 0.7% and return on equity of 5.6% for FY27, and raised FY27/28 earnings estimates by 14% and 18%, respectively.
JM Financial upgraded the stock to Add with a target of Rs 925, calling IndusInd Bank an institution now entering a “stabilisation phase” with improving asset quality and a stronger liability franchise. “The worst appears behind,” it said, adding that growth should follow as the balance sheet normalises.
Bears remain: Kotak and UBS unimpressed
Not all are buying the rally. Kotak Institutional Equities maintained its Reduce rating with a target of Rs 800, describing a “mixed quarter” where lower slippages translated into lower credit costs, but return on equity remained weak at just 3% due to soft operating profitability.
“With balance sheet surprises largely behind us, attention shifts to RoE recovery,” Kotak said, adding that the path to re-rating “appears slower than anticipated.”
UBS held its Sell rating with a target of Rs 730, the most bearish on the Street, arguing the stock is “fully valued given weak growth.” It pointed to a loan book that contracted 0.5% sequentially, a drop in the loan-to-deposit ratio of 160 basis points, and the bank’s own guidance of growing only at system levels in FY27, with an exit return on assets target of around 1%.