IndusInd Bank Share Price Continues to Fall Following RBI Decision; Nuvama Holds, Motilal Oswal Recommends BUY Rating; Investor Uncertainty Persists.
IndusInd Bank Stock: IndusInd Bank's share price is witnessing a continuous decline. The pressure on the bank's shares has intensified, particularly after the RBI's recent decision. Investors are left questioning whether to hold or sell the stock. Let's examine the brokerage firms' opinions and the underlying reasons.
Investor Concerns Following RBI Decision
On Monday, March 10th, IndusInd Bank's shares fell by more than 5% in early trading. The primary reason for this decline is the Reserve Bank of India's (RBI) recent decision. The central bank reappointed Sumant Kathpalia as MD & CEO for only one year (until March 23, 2026), despite the bank's board proposing a three-year term. This decision created a negative sentiment in the market, putting further pressure on the bank's shares.
Brokerage Firm Nuvama Maintains Hold Rating
Brokerage firm Nuvama maintained a Hold rating on IndusInd Bank's shares, setting a target price of ₹1,115. According to the brokerage, the RBI's decision carries negative implications for the bank, impacting investor sentiment.
Nuvama believes the bank will utilize this one-year period for the new CEO selection process. Furthermore, considering recent appointments, the likelihood of an external candidate succeeding Kathpalia as CEO has increased, potentially affecting the bank's performance.
Motilal Oswal Maintains BUY Rating
Conversely, brokerage firm Motilal Oswal maintained a BUY rating on IndusInd Bank but reduced its target price to ₹1,100. The brokerage estimates a 17% increase in share price over the next 12 months.
Motilal Oswal stated that they have reduced their earnings estimates for the bank by 9.3% and 10% for FY26E/FY27E, respectively. However, they believe that most uncertainties have already been factored into the current valuation, and the bank's long-term performance could improve.
Is This the Right Time to Invest in IndusInd Bank?
IndusInd Bank's shares have recently experienced significant declines:
Last one year: 42.45% decline
Last three months: 8.41% decline
Last one month: 14.71% decline
The main reasons for this decline are the RBI's decision and the ongoing uncertainty surrounding the bank's top management. Additionally, the bank is already facing the impact of a weak microfinance institution (MFI) cycle, which may continue to exert pressure in the near future.
Investment Strategy for Investors
Short-term investors: Those with a short-term outlook may consider staying away from this stock, as further declines are possible.
Long-term investors: If you are a long-term investor, the stock may be attractive at its current valuation, considering the bank's b fundamentals. However, it is crucial to monitor the appointment of the new CEO and the bank's performance.
Brokerage opinions: Nuvama has a Hold rating, while Motilal Oswal recommends BUY. Therefore, investors should make their decisions based on their own risk assessment.
