Shares of climbed as much as 3.9% on Wednesday to Rs 841 on the BSE after global brokerage Nomura upgraded the stock to a ‘buy’ and sharply raised its price target, citing improved governance, a cleaned-up balance sheet, and a stronger earnings outlook.
Nomura increased its price target on the private lender by 50%, from Rs 700 to Rs 1,050, and upgraded its rating from ‘neutral’ to ‘buy’. The new target implies a potential 30% upside from Tuesday’s closing price.
“The past few months have been turbulent for IndusInd Bank owing to governance failings and accounting lapses. However, the bank has undergone a significant clean-up of its books and has taken one-time provisions to address legacy issues,” Nomura said.
The brokerage noted that the bank’s board is showing a “clear intent to start FY26F on a clean slate” and highlighted the ongoing search for new leadership as a constructive step.
It also cited “recent comments from the Reserve Bank of India (RBI) acknowledging IndusInd Bank’s recovery efforts” as a source of regulatory comfort, adding that potential approval for the promoter to raise its stake could help ease investor concerns.
Stronger fundamentals, improved outlook
Nomura compared IndusInd Bank’s current trajectory to past turnaround cases such as RBL Bank in 2021 and Yes Bank in 2018, where concerns over prompted leadership changes. In both instances, “while near-term stock performance was muted, we did see a revival of performance over the medium term as fundamentals improved,” the brokerage noted.
It highlighted IndusInd’s healthy capital and liquidity buffers, with a CET-1 ratio of 15.1% and a Liquidity Coverage Ratio (LCR) of 118%. The bank’s “strong business model in retail” is expected to support a faster recovery in profitability.
Nomura raised its FY27–28F earnings per share (EPS) estimates by 14–16%, citing stronger net interest income (NII) and lower credit costs. It now expects return on assets (RoA) to improve to 0.8–1.1% and return on equity (RoE) to 7–10% over FY26–28F.