IndusInd Bank stock nears 52-week high, forms ascending triangle pattern; time to buy, sell or hold?

Shares of IndusInd Bank have approached their 52-week high of Rs 1,275.25 hit on September 20, 2022.  Currently, the stock is trading 1.95% lower at Rs 1,215 on BSE. In technical terms, the banking stock is looking strong with an ascending triangle setup. The relative strength index (RSI) of IndusInd Bank stands at 56.8, signaling neither the stock is overbought or oversold. The stock has a one-year beta of 1.4, indicating very high volatility during the period. IndusInd Bank shares are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

However, the stock has fallen after two sessions. In a year, the stock of IndusInd Bank has gained 32.21 per cent but lost 0.36 per cent in 2023. Total 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 2.62 crore on BSE. The market cap of the bank stood at Rs 94,585 crore. 

The private sector lender reported a sharp 60.4% year-on-year (YoY) rise in net profit for the quarter ended September to Rs 1,787 crore. Net interest income in Q2 rose nearly 18% to Rs 4,302 crore. Provisions in the September quarter fell over 33% on year to Rs 1,141 crore. In the previous quarter, provisions stood at Rs 1,250 crore.

Here’s a look at what analysts and brokerages said on the prospects of the stock going ahead.

Laxmikant Shukla, Technical Research Analyst, YES Securities said, "Since the last few months, the stock is consolidating within a broad trading range Rs 1275-1115 levels indicating strong consolidation. The stock has recaptured 20,50 and 100 days SMA’s and is sustaining above the same. From the last few weeks, stock is running in the ascending triangle pattern on the weekly chart. On the downside, stock has a support of rising trend line which is coming from the lows of Rs 763. Daily MACD and RSI is also looking positive which implies strength. Traders should buy, hold and accumulate this stock around the levels of Rs 1220-1210 with an expected upside of Rs 1410 with downside support of Rs 1110."

Vinit Bolinjkar, Head of Research, Ventura Securities said, "IndusInd Bank reported strong business update for Q3FY23. Loan book is seeing robust trend with 19% YoY growth. CASA mix continues to remain healthy at 42%. Deposits witnessed healthy 14%% growth, with focus on ramping up Retail deposits. Based on the pattern, IndusInd Bank can see an upside of 15-20%. One can keep a stoploss of  Rs 1175 on closing basis."

In the beginning of this month, global research firm CLSA upgraded IndusInd Bank to buy and raised target price to Rs 1,500 per share, an upside of over 21 percent from the market price. CLSA believes that for Indian banks, 2023 should also be a strong year especially H1 CY23.

"Margins would only partly normalise from H1 CY23 while large cap financials to have a lot of opex flexibility in the next 12-18 months. Overall, we expect peak RoEs to sustain in FY24," the brokerage firm said.

Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "IndusInd Bank stock is hovering near its 52-week high and is placed above all its major exponential moving averages on the daily chart, suggesting inherent strength. The stock has been in consolidation for quite some time and is facing resilience to have a fresh breakout. On the technical front, the immediate support is placed around Rs 1180, followed by the weekly swing low of the  Rs 1140-odd zone. On the contrary, a decisive breakthrough above  Rs 1265 could only trigger a fresh round of rally in the counter. And in the meantime, the stock is expected to hover in between the mentioned range with bullish biasness."

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas said, “IndusInd Bank has been in a consolidation phase since the end of September 2022. In terms of the price patterns, it has formed a multi month triangle, which is still in formation. The overall structure shows that the pattern is eventually expected to breakout on the upside where the breakout level is at  Rs 1,274. Recent structure indicates that the stock is trading near its key daily moving averages & one can consider staggered buying in the range of  Rs 1230-1200 with reversal below  Rs 1155. Once the pattern breaks out on the upside, the stock can reach the target of Rs 1350.”

 Abhijeet from Tips2trade said, “Rs 1273 remains a strong resistance for IndusInd Bank on the Daily charts. If daily close is above this resistance post Q3FY23 results, target of  Rs 1390 could be possible. Strong support will be at  Rs 1189." 

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