IndusInd Bank Faces Bearish Outlook as Majority of Analysts Issue 'Sell' Ratings; Goldman Sachs Downgrade

Shares of IndusInd Bank fell by as much as 3% on Wednesday, 2 July, following a downgrade from Goldman Sachs, which revised its recommendation to "sell" from "neutral". This update marks a continuation of the brokerage's cautious stance, after previously downgrading the stock from "buy" to "neutral" at the start of 2025.

IndusInd Bank Share Price Today

On July 2, IndusInd Bank Ltd ended the trading session on a negative note, closing at Rs 856.75 on the National Stock Exchange (NSE). The stock declined by Rs 22.35, registering a 2.54% drop compared to its previous close. Despite this dip, the stock remains up 5% over the past month, signalling some degree of investor resilience amidst broader concerns.

Goldman Sachs Revises IndusInd Bank Shares Price Target, Warns of 18% Downside

Despite the downgrade, Goldman Sachs raised its price target for IndusInd Bank to Rs 722 from Rs 634. However, this new target still implies an 18% potential downside from the stock's recent closing level on Tuesday. Notably, the current target is a substantial 60% lower than the Rs 1,828 per share peak forecast that Goldman Sach's had issued in January 2024.

Goldman Sachs highlighted deeper underlying concerns, calling IndusInd Bank a "structurally weaker franchise". The firm predicts that the bank's Return on Assets (RoA) will decline in the near term. The brokerage further noted, "we believe that the bank is likely to have a weaker growth and returns profile even after normalisation of its trajectory in the second half of the current financial year or in financial year 2027."

Margin Pressures Lead to Cuts in Earnings Forecasts

On the back of projected weak returns, Goldman Sachs reduced its Earnings per Share (EPS) estimates for the bank by 25% for FY2026 and 17% for FY2027. The revisions reflect anticipated persistent margin pressure, arising from a weaker yield environment and higher funding costs.

Given these concerns, Goldman Sachs expects IndusInd Bank's valuation to remain below book value. The brokerage commented that there is "poor visibility" regarding any near-term turnaround, which further limits share price upside.

Analyst Sentiment Largely Negative on IndusInd Bank

Of the 46 analysts covering IndusInd Bank, 23 hold a "sell" rating, 13 recommend "hold", and only 10 maintain a "buy" rating-reflecting a generally cautious stance across the market.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.