IndusInd Bank shares surged by 3% after announcing its Q3FY25 financial results, which showed a net profit of ₹1,402 crore, marking a 39% year-on-year decline due to increased operating costs and higher provisions. However, the bank’s sequential net profit grew by 5%, highlighting stability despite challenges.
The bank reported strong loan growth, with total loans reaching ₹3,66,889 crore, up 12% YoY, and deposits grew 11% YoY to ₹4,09,438 crore. While total assets increased by 12% YoY to ₹5,49,499 crore, net interest income declined slightly by 1% YoY to ₹5,228 crore. The bank’s operating profit saw an 11% YoY drop, impacted by rising costs.
Despite profitability pressures, the bank’s asset quality improved, with the net NPA ratio standing at 0.68%, an 11 basis points improvement YoY. The cost-to-income ratio increased to 52.52%, reflecting higher operating expenses. IndusInd Bank’s NIM stood at 3.93%, showing a decrease of 36 basis points YoY.
IndusInd Bank’s stock opened at ₹977.00 today, lower than its previous close of ₹991.20. The stock reached a low of ₹972.40 and a high of ₹1,023.00. Over the past 52 weeks, the stock has seen a low of ₹923.70 and a high of ₹1,576.35.
Brokerage Views
CLSA and Bernstein both maintain an Outperform rating, targeting ₹1,300, a potential 31% upside from current levels. Both brokerages acknowledge short-term pressures in the MFI sector but highlight a positive outlook for the bank in the medium term.
CLSA notes that while the quarter was muted due to MFI stress, loan growth was modest at 12% YoY, and non-MFI retail slippages showed some improvement. Bernstein shares similar optimism, pointing out that the worst may be over for the MFI segment despite a 40% decline in EPS for the second consecutive quarter.
On the other hand, HSBC adopts a more cautious view, lowering its target price to ₹1,150, suggesting a 15.5% upside. The brokerage cites ongoing stress in the MFI segment and revised its FY26-27 EPS estimates downward by 12-16%. Despite these challenges, HSBC believes the stock’s risk-reward ratio is favorable at 1x FY26 estimated book value, with medium to long-term value potential.
