Morgan Stanley has reiterated its Underweight rating on IndusInd Bank with a target price of ₹750, implying a downside from the current market price of ₹854.50. The brokerage pointed to continued weakness in loan growth and concerns around leadership transition as key reasons for its cautious stance.
Net loans declined 3% quarter-on-quarter in Q1FY26, following a 6% QoQ decline in the previous quarter. On a year-on-year basis, loan book contraction stood at 4%, reversing the +1% YoY growth seen in the prior quarter. The decline was primarily driven by the corporate banking segment, which saw a 6% QoQ drop—mirroring the decline seen last quarter. On an annual basis, corporate loans fell 14%, compared to a 6% YoY decline earlier.
Meanwhile, the consumer loan segment showed more resilience, declining by 1% QoQ versus a 2% increase in the previous quarter. Morgan Stanley noted that the bank’s loan mix is shifting away from higher-margin segments, which could weigh on future profitability.
Adding to investor uncertainty is the ongoing search for a new CEO, which the brokerage believes may further dampen sentiment in the near term.
Disclaimer: The views expressed above are those of Morgan Stanley and do not constitute investment advice. This article is for informational purposes only.
