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Shares of IndusInd Bank Ltd were in focus in Tuesday’s trade, January 6, after the private sector lender released its quarterly business update for the December quarter after market hours on Monday. The stock was trading 1.83 per cent higher at Rs 916.45 on the NSE around 11:36 am, as investors assessed the operational performance and brokerage commentary.

While the business update highlighted pressure on loan growth and deposits, brokerage firms largely maintained a longer-term constructive view, citing consolidation in FY26 and a recovery from FY27 onwards.

IndusInd Bank reported a 13 per cent year-on-year decline in loans for the December quarter. Net advances stood at Rs 3.18 lakh crore, compared with Rs 3.66 lakh crore in the year-ago period.

On a sequential basis, advances declined 2.2 per cent, reflecting consolidation in certain portfolios. Analysts pointed out that corporate lending and the microfinance (MFI) segment remained key drags during the quarter.

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Total deposits declined to Rs 3.94 lakh crore in the December quarter, down from Rs 4.09 lakh crore last year. However, deposits improved 1 per cent quarter-on-quarter from Rs 3.89 lakh crore at the end of September.

Retail deposits also mirrored a similar trend, showing year-on-year pressure but modest sequential improvement.

The lender’s CASA ratio stood at 30.3 per cent, down from 34.9 per cent a year ago and 30.7 per cent in the September quarter. The moderation in CASA continues to raise concerns around funding costs, especially in a competitive deposit environment.

Global brokerage Jefferies maintained its Buy rating on IndusInd Bank, while raising its target price to Rs 1,050 from Rs 920.

Commenting on the December-quarter performance, Jefferies said the 13 per cent YoY and 2 per cent QoQ decline in loans reflected consolidation in the corporate lending and MFI segments. However, the brokerage noted that auto and SME segments are witnessing some uptick.

On the liabilities side, Jefferies highlighted that the decline in deposits was relatively lower at 4 per cent YoY, with a 1 per cent sequential increase, and retail deposits following a similar pattern.

The brokerage expects the bank to remain in consolidation mode through FY26, but sees improvement from FY27 onwards, supported by the new leadership team under the incoming CEO.

Nomura also maintained a Buy rating on the stock, with a target price of Rs 875.

Ahead of the third-quarter results, Nomura said the weak loan and deposit growth underscores that IndusInd Bank is undergoing a substantial overhaul in processes, senior management and overall strategy.

The brokerage noted that management has indicated FY27 as a return-to-industry-growth year, followed by market share gains in select segments from FY28 onwards.

As of the September quarter, mutual funds held a 23.6 per cent stake in IndusInd Bank. Key mutual fund investors include UTI MF, Nippon Life MF, Kotak Mahindra MF, Mirae Asset MF, HDFC MF and ICICI Prudential MF. Life Insurance Corporation of India (LIC) held a 5.1 per cent stake.

Prominent foreign investors include the Government of Singapore, Government Pension Fund Global and BNP Paribas.

IndusInd Bank shares closed at Rs 897 on Monday. While the stock remains well below its lifetime highs, it has rebounded nearly 50 per cent from its 52-week low of Rs 606, which was hit during the derivative accounting crisis.

Market participants said the stock’s next leg of movement will depend on clarity around loan growth revival, deposit traction and execution under the new management team.

Shweta Birendra Shukla is a Senior Sub-editor at Zee Business, born and raised in Mumbai—the city that never sleeps and the financial capital that never stops buzzing.