Shares of private lender IndusInd Bank gained as much as 2 percent to Rs 819 after it reported better-than-expected results for the first quarter. The lender reported a 68 percent decline in standalone net profit at Rs 684 crore, hurt by a decline in loans and a rise in provisions for potential bad loans. On a consolidated basis, net profit fell 72 percent year-over-year to Rs 604 crore.

The lender's net interest income fell 14 percent year-on-year to Rs 4,640 crore in Q1FY26. According to a sources's poll, IndusInd Bank's net interest income (NII) was seen at Rs 4,279 crore in Q1FY26 and profit was pegged at Rs 559 crore in Q1FY26.

Should you buy, sell or hold the IndusInd Bank stock?

Macquarie has an underperform call with a target of Rs 650, implying a downside potential of 19 percent from the last close on the NSE. Its Q1 profit was in line with expectations, supported by higher NIMs and treasury gains, but these were offset by weak fee income. Elevated slippages led to higher credit costs, and the brokerage expects return on assets (RoAs) to stay below 1 percent in the near term.

CITI has a sell rating and a target price of Rs 765. The brokerage said Q1 results pointed to a gradual reset in key levers such as NIM, fee income, and credit costs. While legacy issues didn’t reappear, fee-to-assets dropped to 1.2 percent, and credit costs stayed high at 2 percent. Slippages in the MFI portfolio nearly halved, but stress in vehicle finance and broader retail led to overall slippages of 3 percent. GNPAs rose across segments, though core NIM at 3.35 percent was a positive surprise. CITI believes improvement depends on stabilising NIMs, growing fees, cutting costs, and lowering credit costs.

CLSA has a hold call with a target of Rs 725. The international brokerage noted that management is focused on stabilising the business, and the board has submitted MD & CEO nominations to the RBI. Loans and deposits both fell 3 percent quarter-on-quarter, mainly due to weakness in the wholesale segment. Core NIM declined by 12 basis points QoQ, in line with trends seen in other large private lenders.

Bernstein is outperforming on the stock with a target price of Rs 1,000. It noted that Q1 results showed no impact from previous clean-up efforts, but persistent issues remain, including asset quality deterioration, weak fee income, and subdued NIMs. Bernstein flagged the lack of clear levers to improve RoA in the near term, which may prompt a reassessment of the bank’s profitability outlook.

During the quarter, the Bank’s Total Capital Adequacy Ratio as per Basel III guidelines (excluding Q1 profits) stands at 16.63 percent as on June 30, 2025, as compared to 17.04 percent as on June 30, 2024.

IndusInd Bank shares have fallen 17 percent since the beginning of the year.