IndusInd Bank shares: Emkay raises target price by 38%; a turnaround story loading?

Domestic brokerage firm Emkay Global Financial Services Ltd has upgraded its rating on IndusInd Bank Ltd and has revised its target price by 38 per cent, citing its confidence in the new management of the private lender. In early 2025, IndusInd Bank faced a major crisis driven by a Rs 1,500–2,100 crore accounting discrepancy in its derivatives portfolio, followed by exit of its top management.

After the exit of Sumant Kathpalia, Rajiv Anand took charge as the new Managing Director and CEO of the bank on August 25, 2025, for a three-year term. The brokerage firm sees the decisive push on fixing structural gaps—reorienting the asset-liability mix, strengthening governance/internal controls, and rebuilding leadership, thus setting the stage for a sustained turnaround.  

IndusInd Bank has turned profitable after a loss in Q2FY26 and has given guidance for system in-line credit growth and an exit RoA of 1 per cent in FY27, said Emkay. "We expect the RoA to further improve to 1.3-1.5 per cent over FY28-29E, as the growth/asset-quality recovery gains further traction and thus drives a stock re-rating," it said.

Following the turmoil around management and accounting discrepancies, shares lost nearly 60 per cent of its value since the onset of the issue. The stock dropped to sub Rs 600-levels. The stock rose more than 2 per cent to Rs 947.50 on Friday, with its total marketcap nearing Rs 72,500 crore. The stock is up 57 per cent from its 52-week low at Rs 605.40 hit in March 2025.

Emkay notes that improving sectoral tailwinds and favorable sentiment toward large private banks should further aid IndusInd Bank's re-rating, akin to Federal Bank. "Accordingly, we boosted our target price to Rs 1,100 (from 800 earlier). Further re-rating will be contingent on sustained execution of the strategy and no asset-quality/ regulations based interruptions," it said with a 'buy' tag.

IndusInd Bank reported a 89 per cent fall in the net profit on a year-on-year (YoY) basis to Rs 161 crore, while its net interest income fell 13 per cent YoY to Rs 4,562 crore in the December 2025 quarter. Its net interest margin stood at 3.52 per cent for the quarter, NPAs on both net and gross levels improved marginally on a sequential basis.

"In our view, IndusInd Bank will see an overhang in the near-to-medium term due to de-growth in the loan book, and higher credit costs in the unsecured loan segment," said Nirmal Bang Institutional Equities. We maintain our ‘hold’ rating on the lender with a target price of Rs 900 (valued at 1 times December 2027E ABV)."

IndusInd Bank grew the slowest among PVBs at 1 per cent QoQ. Its credit cost, which had spiked to 3.2 per cent due to MFI provisions in Q2, moderated by 58 bps to 2.6 per cent in 3Q but remained elevated, said Systematix Institutional Equities with a 'hold' rating and a target price of Rs 950.

In its observation, BNP Paribas said that IndusInd Bank's Q3 results were miss on several fronts; while credit cost was 29 per cent/25 per cent above BNPPe/BBGe. Loan book declined 13.4 per cent YoY driven by decline in MFI and corporate book. It had an underweight rating on the lender with a target price of Rs 870.