IndusInd Bank rises 3% on UBS upgrade; notches 9% gain in last 3 sessions

IndusInd Bank is likely to get added to the MSCI India Index during the rebalancing exercise in August following a sharp increase in the investment legroom for foreign portfolio investors (FPIs)

Shares of IndusInd Bank (IIB) were up 3 per cent at Rs 1,174 on the BSE in Wednesday’s otherwise range-bound market. The upmove came after UBS upgraded the private sector lender to 'buy' from 'neutral'.

 

The brokerage has also raised the target price on the stock to Rs 1450 from Rs 1250 per share, Moneycontrol reported. In comparison, the S&P BSE Sensex was up 0.11 per cent at 61,831 at 01:12 pm.

The stock was trading higher for the third straight day and has rallied 9 per cent during this period. It had hit a 52-week high of Rs 1,275.25 on September 20, 2022.

The benign corporate credit cycle and peaking of interest rates are going to be favorable for the bank, according to UBS. Whereas, stable corporate, CV & MFI cycles are going to support operating metrics.

 

Meanwhile, IIB is likely to get added to the MSCI India Index during the rebalancing exercise in August following a sharp increase in the investment legroom for foreign portfolio investors (FPIs). The addition will be a boost for the private sector lender’s stock price as it could result in inflows of over $300 million (Rs 2,500 crore), the Business Standard reported. 

 

Analysts at KR Choksey Institutional have a ‘buy’ rating on IIB with a target price of Rs 1,475. IIB reported a healthy set of numbers in Q4FY23 with strong growth in loan book, stable NIMs and lower provisions. IIB reported a 21.3 per cent YoY growth in advances, led by higher disbursement and strong growth in the consumer and corporate segments. The auto and MFI segment saw a gradual improvement and is expected to be sustainable - in upcoming quarters, the brokerage said.