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On Thursday, UBS analyst Vishal Goyal adjusted the price target for Indusind Bank Ltd (IIB:IN), reducing it to INR600.00 from the previous INR770.00. The firm continues to recommend a Sell rating on the bank’s shares. This decision follows the bank’s recent disclosure of an accounting discrepancy amounting to approximately 2.35% of its net worth, which translates to around Rs16 billion. The final impact of this discrepancy is yet to be determined.
Goyal noted that since the second quarter, there has been a substantial decrease in the bank’s earnings estimates, ranging between 25% and 35%. This reassessment of the bank’s performance is compounded by the decision to extend the tenure of the current CEO by only one year, increasing the uncertainty surrounding the bank’s leadership and future direction.
UBS has also revised its projections for Indusind Bank’s future earnings, with a reduction of approximately 14% for the fiscal year 2026 and 15% for fiscal year 2027. The new estimates take into account an anticipated slowdown in loan growth, a compression in margins by about 20 to 25 basis points, and higher credit costs.
Despite the current stock price appearing low when compared to historical values—approximately 0.7 times the projected book value for September 2026—Goyal expressed concerns regarding the bank’s strategic path. The analyst pointed out that limited balance growth, low return on equity (ROEs), and the ongoing uncertainty about the bank’s ability to sustain profitability might lead to further devaluation of the stock.
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