IndusInd Bank shares climbed 5% today; should you 'sell-on-rise'?

Shares of IndusInd Bank Ltd rose 5.11 per cent to settle at Rs 682.75 on Monday. Despite the mentioned uptick, the crisis-hit private lender's stock has slumped 30.63 per cent in the past one month due to accounting deviations. The bank has been facing multiple headwinds, clouding its near-term outlook. The key concern is a 2.35 per cent overstatement in its derivatives portfolio, stemming from long-standing internal trade accounting discrepancies.

Today's rebound in the share price came after it was reported that the lender has carried out multiple deals with private banks such as Federal Bank and ICICI Bank by transferring highly-rated corporate loans, aiming to shore up liquidity.

With that being said, analysts largely remained 'bearish' on IndusInd Bank. One of them suggested maintaining a 'sell-on-rise' approach. Support could be seen in the Rs 630=20 range while resistance may be found above Rs 700.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "IndusInd Bank has been navigating a corrective phase following the decline experienced in March. During this period, the stock has consistently hovered in the oversold territory. This suggests that it may be undervalued. Currently, the stock faces significant resistance at Rs 700 level, which may pose a challenge for upward price movement. On the downside, there appears to be a robust support level around the Rs 620 zone, providing a safety net during this volatile period. Investors are closely watching these key levels as they may influence future trading decisions."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, said, "Support will be at Rs 630 and resistance at Rs 710. A decisive move above Rs 710 level may trigger a further upside towards Rs 730. The expected trading range will be between Rs 630 and Rs 730 for the short term."

Ameya Ranadive, CMT, CFTe & Senior Technical Analyst at StoxBox, said, "IndusInd Bank remains in a sideways consolidation phase after witnessing a sharp decline over the past month. The stock has seen a sharp downward run, driven by accounting discrepancies. It remains a 'sell-on-rise' candidate as the broader trend is still bearish. The price is trading well below all key moving averages, indicating continued weakness. Resistance is evident around Rs 748-776 levels, where supply zones are active. Momentum indicators suggest that the stock lacks strength for a sustainable recovery. Unless it reclaims key resistance levels, the downside bias is likely to persist."

As of December 2024, promoters held a 16.29 per cent stake in the private bank.