IndusInd Bank reported a 4.5% year-on-year increase in total deposits to ₹4,14,992 crore for the quarter ended June 30, 2026, while net advances stood at ₹3,26,171 crore, marking a 2.3% decline compared to the same period in the previous year. Despite stronger-than-expected quarterly performance, Citi has maintained its Sell rating on the stock with a target price of ₹800, citing persistent structural concerns around the loan book and deposit quality.

Citi's Analyst View

Citi acknowledged the stronger-than-expected advances growth of 3.3% quarter-on-quarter and robust deposit performance in 1QFY27, along with improved confidence in management's growth guidance. However, the brokerage retained its cautious stance, pointing to the loan book remaining 2.3% below last year's levels, a declining CASA ratio, and the ongoing rationalisation of bulk deposits as key headwinds that continue to weigh on the bank's outlook.

Quarterly Performance Snapshot

Sequentially, deposits grew by 3.8% from ₹3,99,931 crore in the preceding quarter ended March 31, 2026, while net advances increased by 3.3% over the same period. Retail deposits and deposits from small business customers rose to ₹1,93,618 crore as of June 30, 2026, up from ₹1,91,263 crore as of March 31, 2026. The bank's Current Account Savings Account (CASA) ratio stood at 29.5% for the period under review, down from 31.5% recorded on June 30, 2025. The information provided is subject to limited review by the statutory auditors of the bank.

The following table outlines the bank's key performance figures compared to the preceding quarter and the corresponding period of the previous year.

Key Concerns Flagged

The following table summarises the key factors underpinning Citi's Sell rating on IndusInd Bank.

While the sequential improvement in advances and deposit mobilisation reflects some operational momentum, Citi's maintained Sell call underscores concerns that the loan book recovery and CASA trajectory remain insufficient to justify a more constructive view at current levels.

Promoters of IndusInd Bank , IndusInd International Holdings Limited and IndusInd Limited, restructured their share pledges on June 30, 2026, to refinance existing indebtedness. The transactions involved the release of shares by one promoter entity and the creation of a new pledge by another, while the aggregate promoter holding remained unchanged at 15.08% of the paid-up share capital. The restructuring was executed to optimize the security cover for lenders, maintaining a ratio of 1.31:1 against the involved amount of ₹30,600,000,000.

IndusInd International Holdings Limited released 1,12,88,989 shares, representing 1.45% of the total share capital. Following this release, the entity's encumbered holdings decreased to 1,10,00,000 shares, or 1.41% of the total share capital. Concurrently, IndusInd Limited created a pledge on 1,12,88,989 shares, which also represents 1.45% of the total share capital. As a result, IndusInd Limited's total encumbered holdings rose to 3,92,67,535 shares, accounting for 5.04% of the bank's equity.

The disclosures were submitted to the stock exchanges on July 2, 2026, pursuant to Regulation 31(1) and 31(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The shares were pledged in favor of Catalyst Trusteeship Limited, acting as the security agent for lenders including J.P. Morgan Securities plc, Deutsche Bank AG, Singapore Branch, Barclays Bank PLC, and Citibank N.A., London Branch.

Shareholding Details

The restructuring altered the distribution of encumbered shares within the promoter group but did not change the aggregate promoter shareholding. The total number of shares encumbered by the promoters post-transaction stands at 5,02,67,535, which constitutes 6.45% of the total share capital. The value of the shares on the date of the event was reported at ₹40,214,028,000.

The bank confirmed that the encumbered shares do not constitute 50% or more of the total promoter shareholding, nor do they represent 20% or more of the bank's total share capital. The voting rights attached to the pledged shares remain with the pledgors in accordance with the terms of the pledge agreement.