IndusInd Bank gets more downgrades, price target cuts after one year extension for CEO

The board had approved a three-year extension for the CEO.

UBS has downgraded the stock to “sell” from its earlier rating of “neutral” and also cut its price target to ₹850 from ₹1,070 earlier. This is the lowest target on the street for the lender.

The brokerage wrote in its note that a one-year tenure is negative for the bank’s near-term earnings outlook as the focus will shift back to regulatory prescriptions.

UBS also fears that a lack of strategic direction and lower growth are likely to result in a further de-rating for the bank.

As a result, UBS has cut its IndusInd Bank’s Earnings per Share (EPS) estimates for financial year 2026 – 2027 by 10.5%.

BofA Securities has double downgraded the stock to an “underperform” from its earlier rating of “buy” and also cut its price target to ₹850 from ₹1,250 earlier.

The brokerage worries that it might take 12-18 months to get clarity around the bank’s management and future strategic decisions. BofA added in its note that a re-rating for IndusInd Bank is unlikely until more clarity emerges.

Jefferies has also cut its price target on IndusInd Bank to ₹1,080 from ₹1,200 earlier but maintained its “buy” recommendation on the stock.

The brokerage said that the RBI’s move to give only a one-year extension may prompt the bank to begin the succession process. It expects the stock to remain rangebound until succession clarity emerges and stability is achieved on the MFI and Auto Loan segments.

However, it retained its “buy” rating citing attractive valuations.

Out of then 51 analysts that have coverage on IndusInd Bank, 30 of them still have a “buy” rating on the stock, 15 said “hold”, while six of them have a “sell” rating. Consensus estimates of price targets imply a potential upside of 24% on the stock.

Shares of IndusInd Bank ended 4% lower on Friday at ₹935. The stock is down 40% from its recent peak of ₹1,576.