IndusInd share target Rs 600 or Rs 1,210? Brokerages remain divided

IndusInd Bank is staring down the barrel of a credibility crisis. After reporting a net loss of Rs 2,329 crore, its first in two decades, and disclosing a suspected internal employee fraud of Rs 172.58 crore misclassified as fee income across three quarters, the stock is getting pummelled by a flurry of downgrades and target price cuts.

UBS has fired the sharpest shot, slapping a 'Sell' rating with a target price of Rs 600, undercutting even the 52-week low of Rs 605.40. The brokerage flagged mounting uncertainty and warned that the stock, already not inexpensive at current levels, could be staring at a valuation derating.

Macquarie, meanwhile, remains the lone contrarian in the room. It has maintained an 'Outperform' rating with a target of Rs 1,210. It argues that if the clean-up is largely behind, IndusInd trades at just 5x trailing PPOP and 0.9x FY25 book — cheaper than peers. But even Macquarie concedes that asset quality is still a concern and admits that clarity on management succession, peak credit costs, NIM stability, and governance remains key.

Amid sharply divided target prices, IndusInd Bank shares swung wildly on Thursday, rallying over 2% to Rs 788.35 on the BSE in early trade before tumbling as much as 4%.

Also read | Rs 2,600 crore accounting missteps: IndusInd Bank suspects fraud involving senior employees

Domestic brokerage IIFL Capital has downgraded the stock to ‘Reduce’ from ‘Add’, slashing the target price to Rs 690 from Rs 750. Calling the journey from discrepancies to frauds a red flag, it estimates the total P&L hit at Rs 47,000 crore, nearly 7% of the bank’s Q3 net worth. IIFL has cut its FY26–27 estimates by 40%, citing weaker fee income, elevated credit costs, slower MFI growth, and margin compression. The coveted 1% RoA, it says, is now a distant reality, with RoA estimates down to 68–83 bps and RoE at a meek 6–7.5%.

ICICI Securities has also weighed in with a ‘Sell’ call and a Rs 650 target. While CET1 and LCR ratios remain healthy at 15.1% and 118% respectively, ICICI flagged that core profitability was weak even after stripping out the one-offs. NIM dropped 46 basis points QoQ to 3.47%, while PPOP fell 24% YoY to Rs 30.6 billion. The brokerage expects single-digit loan growth and credit costs to rise to 1.6% over FY26–27, with RoA staying below 1%.

Investec cut its target to Rs 625 from Rs 650 and slashed earnings forecasts by 40% and 37% for FY26 and FY27, respectively. It said the PBT loss of Rs 30 billion in Q4 and a PPOP-level loss of Rs 4.9 billion underscore the severity of the issue. The brokerage pointed out that the bank’s own disclosures pegged the total fraud impact at Rs 49,000 crore, significantly higher than the Rs 26,500 crore initially disclosed. Slippages soared to Rs 50,000 crore, or 5.9% of loans, led largely by misclassified MFI loans. With RoE stuck around 6–7% and RoA under pressure, Investec believes the outlook remains fragile.

Morgan Stanley has downgraded IndusInd to ‘Underweight’, with a cut in target price to Rs 700 from Rs 755. It said the bear case is playing out, as expected NII misses have been compounded by negative surprises on misclassified MFI slippages. The high-margin loan mix, which supported earlier returns, is now eroding, and will likely drag down RoA further. The brokerage expects a slow earnings recovery from a very weak base.

CLSA called it “a quarter to forget” while trimming its target to Rs 725 from Rs 780. It flagged that core profitability was muted and multiple one-offs led to a Rs 22 billion loss. While slippages outside the MFI book were stable, elevated stress in that segment keeps FY26 cloaked in uncertainty.

HSBC downgraded the stock to ‘Reduce’ from ‘Buy’, albeit while hiking the target price to Rs 660. It said IndusInd has effectively been pushed back to the pre-2009 era and noted there is no visibility yet on the rebuilding process. It cut FY26–27 EPS estimates by over 40%, citing the massive one-off adjustments needed to correct past accounting discrepancies.

Jefferies maintained a ‘Buy’ rating but brought its target down to Rs 920 from Rs 1,040. It noted the clean-up was larger than expected, and the exit run-rate of business is worryingly low. With a new CEO on the anvil, Jefferies believes the forward path now rests entirely on how the leadership transition is handled.

And therein lies the next big trigger. The board has until June 30 to recommend names to the RBI for the MD & CEO role. Several brokerages have flagged this as a critical event that could shape the bank’s strategy, investor sentiment and recovery trajectory.

IndusInd’s stock now finds itself in a brutal tug-of-war. Bulls cling to valuation comfort and hopes of a turnaround. Bears see a long tunnel of weak governance, deteriorating asset quality, and strategic vacuum. Whether it crashes to Rs 600 or claws its way back to Rs 1,210 will depend not just on the next earnings report, but on who’s leading the charge into FY26.