IndusInd Bank slips over 5% after UBS downgrades stock to sell

Shares of IndusInd Bank slipped over 5 per cent in early trade on Thursday after UBS downgraded the stock to ‘Sell’ from ‘Neutral’ with a revised target price of Rs 1,400 (Rs 1700 earlier).

The global financial services firm believes that lending to non-investment grade companies is higher than expectations and credit costs are likely to exceed current expectations, leading to the downgrade.

The scrip was trading 5.40 per cent down at Rs 1483.05 at around 9.53 am (IST), while the benchmark BSE Sensex was trading 123.83 points, or 0.31 per cent, down at 39,635 at around the same time.

The lender last month reported 62 per cent YoY dip in net profit at Rs 360 crore for the quarter ended March 19 due to higher provisioning for loans extended to IL&FS.

Its profit in the year-ago period stood at Rs 953 crore.

During the quarter, it made a provisioning of Rs 1,253 crore towards IL&FS Group. For the full year, provisions stood at Rs 1,803 crore.

Gross NPAs stood at 2.10 per cent as against 1.17 per cent, while net NPAs were 1.21 per cent compared to 0.51 per cent.