Explained - Why Jefferies has the highest target but CLSA downgraded IndusInd Bank after Q1 results

Shares of IndusInd Bank Ltd. fell as much as 6% in response to their June quarter results on Thursday, July 23. The results were reported after market hours on Wednesday.

Despite reporting better-than-feared results, more analysts have a "sell" rating on the stock compared to "buy". 16 out of the 42 analysts covering the Mumbai-based private lender remain bearish on the stock, while only 11 of them are "bullish." 15 others have a "hold" rating on the stock.

Why CLSA Downgraded IndusInd Bank?

The brokerage has downgraded the stock to "underperform" from "hold" but has raised its price target to ₹925 from ₹850.

The brokerage highlighted that the loan growth of 3.6% on a sequentially was driven solely by corporate loans.

IndusInd Bank's management continues to guide for industry-level loan growth in financial year 2027 with an exit RoA of 1%.

Shares of IndusInd Bank have gained 17% in the last one month, which, according to CLSA, is "unwarranted."

Jefferies Gives IndusInd Bank Its Highest Target

Jefferies maintained its "buy" rating on IndusInd Bank and raised its price target to ₹1,250 from ₹1,100 earlier, citing progress on improving trends in growth, asset quality and the core RoA.

The brokerage expects the improvements to continue over the next two to three years as bank leverages the build-up of its new team.

By financial year 2029, IndusInd Bank could report RoA of 1.1%, according to CLSA, aided by a low base.

At 1.3 times its adjusted price-to-book value for financial year 2027, IndusInd Bank's valuations are fair, according to Jefferies, who also added that more visibility on its RoAs reaching 1.5% will be key for further re-rating of the stock.

Citi Also Bearish On IndusInd

Citi had downgraded IndusInd Bank to "sell" in May last year and continues to maintain that rating. However, it has raised its price target on the stock to ₹990 from ₹800 earlier.

The brokerage has revised its financial year 2027-2028 earnings estimates higher by 11% and 5% respectively, adding that the path to 1% RoA by the end of the financial year is projected to be 60% Pre-Provisioning Operating Profit (PPoP) driven and 40% credit cost-driven.

Shares of IndusInd Bank are trading 5.5% lower on Thursday at ₹1,010.7. The stock is among the worst Nifty 500 performers on Thursday so far. Before today's session, the stock was up 20% so far this year.