HSBC has downgraded IndusInd Bank to ‘Reduce’ and cut its target price to ₹660, warning that the lender has regressed to pre-2009 conditions in terms of operational integrity and transparency. The brokerage flagged significant erosion in earnings quality after Q4FY25’s loss.
The bank reported a net loss of ₹2,328.9 crore, with provisions climbing over ₹2,500 crore and net interest income collapsing 43.3% YoY. HSBC highlighted that FY26–27 EPS estimates have been cut by 41–43% due to misclassifications in the MFI segment and other one-off adjustments.
With ROAE of just 0.8% and ROE at 6–7%, HSBC now values IndusInd at 0.7x FY27E BV, reflecting the need for a longer rebuilding phase amid lingering structural concerns.
Disclaimer: This article is based on the brokerage report by HSBC. It does not constitute investment advice.
