IndusInd Bank’s shares fell over 18% to Rs 1,043.30 on Friday after the bank reported a 39% decline in profit compared to the same quarter the previous year, with this quarter’s profit at Rs 1,325 crore. This result fell short of what analysts had anticipated, as they had estimated the profit to be around Rs 2,138 crore. The bank’s profit during the same quarter last year was Rs 2,181.47 crore, showing a substantial year-on-year decrease, which influenced the stock’s sharp fall.
Although IndusInd Bank’s profit declined, its Net Interest Income (NII) actually increased by 5% year-on-year, reaching Rs 5,347 crore. This means the bank earned more from its lending operations compared to the previous year. However, the net interest margin (NIM) fell to 4.08%, down by 21 basis points (bps) from last year and 18 bps quarter-on-quarter. Asset quality also weakened, with gross non-performing assets (NPA) rose to 2.11% and net NPA increased to 0.64%, compared to 1.93% and 0.57% in the same quarter last year.
Analysts have offered mixed recommendations on the stock. Jefferies still recommend buying the stock but have reduced their target price from Rs 1,750 to Rs 1,470, citing weaker asset quality and reduced lending activity. Nuvama downgraded their recommendation from ‘Buy’ to ‘Hold’ with a target price of Rs 1,290. Nomura gave a ‘Neutral’ rating with a reduced target price of Rs 1,220, indicating a balanced view without a strong recommendation to buy or sell. IIFL also reduced their rating from ‘Buy’ to ‘Add’ and set a target price of Rs 1,300.
IndusInd Bank’s 52-week high and low are Rs 1,694.50 and Rs 1,025.50, respectively, with shares posting a 25.95% decline in the last year.
Disclaimer: This report is provided by News Eager and is for informational purposes only. Readers are advised to conduct independent research and consult financial advisors before making any investment decisions.
