Motilal Oswal (MOSL) has maintained its Buy rating on IndusInd Bank with a target price of Rs 1,500. The bank’s Q2 performance was weaker than expected, as it navigates near-term challenges. The brokerage has cut its earnings estimates by 16.7% for FY25 and 8.7% for FY26, projecting a return on assets (RoA) of 1.6% and a return on equity (RoE) of 13.6% by FY26. The current market price (CMP) of IndusInd Bank is Rs 1,279.
Key financial metrics
The bank’s net interest margin (NIM) contracted sharply to 4.08%, while the microfinance institution (MFI) loan mix declined by 149 basis points (bps) to 9.2% of total loans.
Near-term factors to watch
Motilal Oswal highlighted that the progression of asset quality in the bank’s MFI business remains a key focus area. Additionally, the Reserve Bank of India’s approval for a fresh term for the bank’s MD and CEO is a crucial near-term event to monitor.
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