Shares of IndusInd Bank slipped for the fourth straight day, down 4 per cent to Rs 1,280 apiece, hitting a 30-month low on the BSE on Friday amid a weak market sentiment. The stock of the private sector lender was trading at its lowest level since February 3, 2017.
In the past one-week, it has underperformed the market by falling 11 per cent, as compared to a 2 per cent decline in the S&P BSE Sensex. The stock has fallen below its previous low of Rs 1,314 hit on July 31, 2019 in the intra-day trade.
Analysts' concerns about IndusInd Bank’s exposure to stressed groups and the prevailing slowdown in select lending segments added to the woes.
“With slowdown in the auto growth, we remain cautious on future growth of vehicle loan portfolio which forms around 28 per cent of the loan book. Given exposure to stressed accounts (media, diversified, and housing finance) at 1.67 per cent after provisions and exposure to gems & jewellery still remaining standard, we remain sceptical regarding any slippages and its impact on earnings,” analysts at ICICI Securities said in a June quarter result update.
Analysts at JP Morgan have ‘neutral’ rating on the stock as the brokerage firm believes higher interest rates will exert some pressure on IndusInd Bank’s relatively nascent deposit franchise and loan growth in the commercial vehicle book.
"Investors will also need to take a view on the strategy outlook beyond FY21 after Mr Sobti’s retirement. Further, we think the bank’s relative P/BV differential vs. HDFC Bank should moderate as markets start giving a higher valuation to stable deposit franchises," the brokerage firm said in a model update report on July 15, 2019.
At 01:20 pm, IndusInd Bank erased its partial early morning losses and was trading 1.5 per cent lower in an otherwise firm market. In comparison, the S&P BSE Sensex was up 0.51 per cent at 36,658 levels. The trading volumes on the counter jumped 1.5 times with a combined 6.6 million shares changing hands on the NSE and BSE so far.