Goldman Sachs has revised its outlook on IndusInd Bank with a downgrade from Buy to Neutral and a reduced target price of ₹1,090, reflecting a 17% downside. The following points summarize the analysis:
Key Highlights:
- Earnings Projection Slashed: The bank’s EPS estimates have been cut by 5%/16%/18% over FY25/FY26/FY27E, signaling weaker growth prospects.
- Return on Assets (ROAs): Expected to remain subdued at 1.3% for FY25-27E, highlighting operational challenges.
- Revenue Growth Slows: Revenue engines have decelerated over the past two quarters, with expectations of further impact due to a challenging environment.
Major Concerns:
- Rising Delinquencies: Increasing non-performing assets in MSME and commercial vehicle (CV) loans pose a significant risk.
- Slower Loan Growth: The bank is expected to face headwinds in achieving growth in its loan book.
Balanced Risk-Reward:
Goldman Sachs sees a balanced risk-reward scenario for IndusInd Bank, with limited upside potential at its current valuation.
CMP:
The bank’s stock is currently trading at ₹981.00, reflecting a cautious market sentiment.
Disclaimer: This article is for informational purposes only. Please consult your financial advisor before making any investment decisions.
