IndusInd Bank slips below Rs 700; UBS slashes target price by 22%

IndusInd Bank Ltd shares slipped below Rs 700 level in Friday's trade, after rising in the previous three sessions, as foreign brokerage UBS retained its 'Sell' call on the private lender, slashing its target price by 22 per cent to Rs 600 from Rs 770 earlier. 

Following the development, the stock fell 2.58 per cent to hit a low of Rs 691.05. UBS' target suggests 13 per cent downside over this price. 

UBS highlighted several factors that could contribute to the further de-rating of IndusInd Bank. The main concerns include deposit flows, the appointment of a new CEO, and the external auditor's report findings, which the brokerage views as crucial indicators of the bank’s future performance.

Elara Securities said it sees Q4 as a tough quarter for IndusInd Bank, marked by pressure across various line items. It sees vulnerabilities to reflect in asset quality with pressure points expected in the MFI portfolio.

"We expect business momentum to be impacted given the recent episode around derivative accounting and the management transition, which with higher NIMs decline will impact NII growth," Elara Securities said.

Other than IndusInd Bank, UBS has also shared views on banks such as State Bank of India (SBI) and Bank of Baroda (BoB).

The foreign brokerage upped rating on State Bank of India (SBI) to 'Neutral' from 'Sell', as it sees risk-reward balanced. Sustaining of net interest margin (NIM) is key for the stock's re-rating going ahead, the brokerage said.

The SBI stock trades at 1 time September 2026 price to book value and at 20 per cent premium to Bank of Baroda (BOB). UBS suggested a fresh target price of Rs 840 on the PSU bank from Rs 760 earlier, hinting at a potential 8 per cent upside from Thursday's closing price of Rs 779.90 on BSE.
The PSU bank stock was trading 0.33 per cent lower at Rs 776.60. 

UBS, meanwhile, upgraded BOB to 'Buy' from 'Neutral', with a revised target price of Rs 290 from Rs 270 earlier. This stock edged 0.65 per cent higher at Rs 238.25.  

"BOB's weak performance over the past few quarters, was impacted by weak NII growth and an uncertain economic environment driving down loan growth for the system. However, we believe that the loan growth outlook is improving while corporate asset quality looks stable," UBS said.