IndusInd Bank shares: Q3 profit misses estimate; brokerages raise target price; here's why
According to Nuvama, management has guided to a return on assets (RoA) of 1 per cent by the end of FY27, up from 12 basis points (bps) in Q3 FY26.
- Jan 27, 2026,
- Updated Jan 27, 2026 10:22 AM IST
IndusInd Bank returned to profitability in the December quarter (Q3 FY26), but its net profit missed the consensus estimate. Some brokerages raised their target prices while maintaining mixed ratings.
Nuvama Institutional Equities said core PPOP (pre-provision operating profit) increased 12 per cent quarter-on-quarter (QoQ) but declined 36 per cent year-on-year (YoY), while reported standalone PPOP rose 14 per cent QoQ and fell 36 per cent YoY. PAT declined 89 per cent YoY.
"IndusInd Bank turned to profit from loss in Q3 FY26, but PAT missed consensus estimate on higher credit cost and wage provision, partly offset by lower core opex." It added that asset quality "remains weak with elevated slippage especially in CV and MFI, high write-off and high credit cost of 2.6 per cent."
According to Nuvama, management has guided to a return on assets (RoA) of 1 per cent by the end of FY27, up from 12 basis points (bps) in Q3 FY26. The brokerage noted that achieving this target would depend on a decline in slippages, alongside the bank's aspiration to reduce net non-performing assets (NPA) to 0.6 per cent from 1 per cent. On expectations that earnings have bottomed, Nuvama raised its target price to Rs 900, valuing the bank at 1x book value, from Rs 600 earlier, and upgraded the rating to 'HOLD' from 'REDUCE'.
The bank is working on a three-year plan called PACE to strengthen its franchise in vehicles, corporate and rural segments, deepen its focus on small and medium enterprises, enhance customer centricity, and improve execution efficiency.
Elara Capital described the December-quarter performance as part of an ongoing transition. "IndusInd Bank's Q3 FY26 performance reflects its continued transition – with changes in balance sheet, policy, management and organisational structure," it said. While core performance showed improvement, Elara flagged that "asset quality challenges still seem to persist."
Elara said operational performance in Q3 was steady, but challenges could weigh on core performance in FY27. It also highlighted uncertainties around strategic direction under the new management, core operating performance, and asset quality that may entail further write-offs. Despite these factors, Elara said the bank has navigated its crucial phase better, leading it to raise its target multiple to 1x from 0.8x and increase its target price to Rs 910 from Rs 720, while revising its rating to 'Reduce' from 'Sell'.
IndusInd Bank returned to profitability in the December quarter (Q3 FY26), but its net profit missed the consensus estimate. Some brokerages raised their target prices while maintaining mixed ratings.
Nuvama Institutional Equities said core PPOP (pre-provision operating profit) increased 12 per cent quarter-on-quarter (QoQ) but declined 36 per cent year-on-year (YoY), while reported standalone PPOP rose 14 per cent QoQ and fell 36 per cent YoY. PAT declined 89 per cent YoY.
"IndusInd Bank turned to profit from loss in Q3 FY26, but PAT missed consensus estimate on higher credit cost and wage provision, partly offset by lower core opex." It added that asset quality "remains weak with elevated slippage especially in CV and MFI, high write-off and high credit cost of 2.6 per cent."
According to Nuvama, management has guided to a return on assets (RoA) of 1 per cent by the end of FY27, up from 12 basis points (bps) in Q3 FY26. The brokerage noted that achieving this target would depend on a decline in slippages, alongside the bank's aspiration to reduce net non-performing assets (NPA) to 0.6 per cent from 1 per cent. On expectations that earnings have bottomed, Nuvama raised its target price to Rs 900, valuing the bank at 1x book value, from Rs 600 earlier, and upgraded the rating to 'HOLD' from 'REDUCE'.
The bank is working on a three-year plan called PACE to strengthen its franchise in vehicles, corporate and rural segments, deepen its focus on small and medium enterprises, enhance customer centricity, and improve execution efficiency.
Elara Capital described the December-quarter performance as part of an ongoing transition. "IndusInd Bank's Q3 FY26 performance reflects its continued transition – with changes in balance sheet, policy, management and organisational structure," it said. While core performance showed improvement, Elara flagged that "asset quality challenges still seem to persist."
Elara said operational performance in Q3 was steady, but challenges could weigh on core performance in FY27. It also highlighted uncertainties around strategic direction under the new management, core operating performance, and asset quality that may entail further write-offs. Despite these factors, Elara said the bank has navigated its crucial phase better, leading it to raise its target multiple to 1x from 0.8x and increase its target price to Rs 910 from Rs 720, while revising its rating to 'Reduce' from 'Sell'.