IndusInd Bank is facing a wave of downgrades and target price cuts from global brokerage firms after the Reserve Bank of India (RBI) approved only a one-year extension for CEO Sumant Kathpalia, raising concerns over the bank’s long-term strategic direction and leadership stability.
The shares of IndusInd Bank Limited were trading at ₹907.75 down by ₹29 or 3.10 per cent on the NSE today at 11.40 am. The shares reached its 52-week low today at ₹881.10.
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UBS downgraded IndusInd Bank to “Sell”, slashing its target price to ₹850 per share, citing a lack of strategic direction and lower growth outlook, which could lead to further de-rating. The brokerage also cut its FY26/27 earnings per share (EPS) estimate by 10.5per cent, signaling near-term earnings pressure.
BoFA Securities also downgraded the stock to “Underperform”, cutting its target to ₹850 per share, highlighting uncertainty over management succession and the potential 12-18 month timeline to gain clarity on the bank’s future direction.
Goldman Sachs maintained a “Neutral” stance with a target of ₹964 per share, emphasising that the short extension for the CEO delays clarity on management transition while the bank grapples with multiple operational challenges.
Meanwhile, Jefferies and Citi maintained “Buy” ratings but reduced their target prices. Jefferies lowered its target to ₹1,080 from ₹1,200, believing that the CEO’s shorter tenure may push the bank to initiate a succession plan, with Deputy CEO & CFO Arun Khurana emerging as a frontrunner for the top role. Citi, with a target of ₹1,378, noted that the one-year extension signals the RBI’s discomfort and creates uncertainty over CEO continuity beyond this period.
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Macquarie retained its “Outperform” rating with a target of ₹1,210, acknowledging the shorter-than-expected CEO extension as a cause for concern but not ruling out the possibility of another renewal.
The uncertainty surrounding IndusInd Bank’s leadership transition and regulatory prescriptions is expected to weigh on investor sentiment, with analysts closely watching the bank’s operational performance under the existing leadership.
