CLSA has downgraded its target price on IndusInd Bank to ₹900 from ₹1,300, reflecting a 31% cut, while still projecting a 31% upside from the current market price of ₹685.00. The brokerage cited recent challenges, including a ₹15 billion net worth hit due to an accounting gap, which has fueled investor concerns about potential further disclosures.
With a one-year MD extension in place, CLSA expects lingering uncertainty over the next 2-3 quarters, especially regarding management continuity and the possibility of a PSU banker appointment, which could further dampen sentiment. Additionally, there are concerns over a potential invocation of the promoter’s stock pledge by lenders, adding to near-term volatility.
However, CLSA believes fundamentals will take over in the long term, with two key positives in the near term: a recovery in the microfinance segment and margin support from improving banking system liquidity and expected rate cuts.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research before making any investment decisions.
