Fri Oct 25 19:30:21 UTC 2024: IndusInd Bank Ltd experienced a significant drop in its stock price, falling 16% to Rs 1,073 following disappointing September quarter results, which were the weakest among banks reported so far. Key points from the article include:

1. **Earnings Miss**: IndusInd Bank’s Q2FY25 earnings fell short of market expectations due to reduced margins, poor operational performance, and the creation of additional provisional buffers.

2. **Stock Performance**: With Friday’s decline, the stock has lost 31% of its value year-to-date.

3. **Brokerage Reactions**:
– **HDFC Institutional Equities** downgraded earnings forecasts by 12% and maintained a ‘Reduce’ rating with a target price of Rs 1,245.
– **PhillipCapital** observed growth deterioration in unsecured loans affecting margins and increased credit costs. They cut earnings projections by 17.7% for FY25 and 6.4% for FY26, maintaining a ‘Buy’ rating with a revised target of Rs 1,560.
– **Nirmal Bang** downgraded the stock to ‘Hold’ from ‘Buy’, reducing their target price to Rs 1,443, citing factors like slowed loan growth and stress in loan segments.

4. **Loan Growth and Provisions**: The bank reported healthy deposit growth; however, its net interest margin (NIM) contracted sharply. Loan growth is expected to slow to 13% from the previously stated guidance of 18-22% for FY25.

5. **Outlook**: The overall outlook remains cautious due to potential stress in unsecured loans and pending RBI approval regarding the extension of Sumanth Kathpalia’s tenure as managing director.

Overall, the outlook for IndusInd Bank remains bearish amid weakening financial performance and lender caution regarding loan growth.

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