Shares of Mumbai-based private lender IndusInd Bank Ltd. were trading mixed on Monday, July 7, after the bank released its Q1 FY26 business update.The overall performance was weak but largely in line with Street expectations. Both advances and deposits declined by around 3% quarter-on-quarter, keeping the credit-deposit (CD) ratio stable.
Net advances fell to ₹3.34 lakh crore, led by a sharp 6.2% QoQ (14.4% YoY) drop in the corporate banking segment. The consumer lending segment declined marginally by 0.9% QoQ, though it grew 4.8% YoY.
Deposits were also down 3.3% QoQ and 0.3% YoY, while retail and small business deposits remained largely flat. The CASA ratio (current and savings account) dropped to 31.49% from 32.81% in Q4FY25.The fall in advances was primarily due to the sell-down of the corporate loan book to manage liquidity amid deposit outflows. However, the CD ratio stayed stable at 84.2%, compared to 84% in the previous quarter.
On the brokerage front, Morgan Stanley has maintained its ‘Underweight’ rating, with a price target of ₹750 per share. The brokerage cited a decline in high-margin loans and uncertainty around CEO succession.Jefferies has a ‘Buy’ recommendation and a price target of ₹920 per share.
Net advances fell to ₹3.34 lakh crore, led by a sharp 6.2% QoQ (14.4% YoY) drop in the corporate banking segment. The consumer lending segment declined marginally by 0.9% QoQ, though it grew 4.8% YoY.
Deposits were also down 3.3% QoQ and 0.3% YoY, while retail and small business deposits remained largely flat. The CASA ratio (current and savings account) dropped to 31.49% from 32.81% in Q4FY25.The fall in advances was primarily due to the sell-down of the corporate loan book to manage liquidity amid deposit outflows. However, the CD ratio stayed stable at 84.2%, compared to 84% in the previous quarter.
On the brokerage front, Morgan Stanley has maintained its ‘Underweight’ rating, with a price target of ₹750 per share. The brokerage cited a decline in high-margin loans and uncertainty around CEO succession.Jefferies has a ‘Buy’ recommendation and a price target of ₹920 per share.
While loans dropped 3% QoQ and 4% YoY due to weakness in corporate banking, consumer loans grew 5% YoY and retail deposit stability may be viewed positively
India Ratings removed its Ratings Watch with Negative Outlook, which may also be appreciated by the market, the brokerage said.
Citi maintained a ‘Sell’ rating on IndusInd Bank, with a price target of ₹765.
Motilal Oswal, with a ‘Neutral’ stance, said clarity on the new CEO’s appointment and strategic direction will be key to improving visibility on growth and long-term prospects.
Shares of IndusInd Bank are currently trading 0.13% lower at ₹855.10. The stock is up 3% so far in the last one month.
