Two prominent Indian largecap banks, IndusInd Bank and YES Bank, are currently flagged by analysts as having the highest downside potential within the BSE100 index. This assessment, based on Bloomberg consensus data compiled by Business Today, indicates a cautious outlook from financial experts for these widely tracked stocks.
IndusInd Bank: Leading the Downside Projections
IndusInd Bank, held by over 5.47 lakh small investors as of June 30, faces a consensus target price of Rs 891.65 from 42 analyst projections. Against its current price, this implies a significant 13.5% potential downside, positioning it as the largecap stock with the steepest anticipated decline in the BSE100 pack.
Brokerage views on IndusInd Bank are predominantly bearish, with Macquarie setting the lowest target at Rs 625 on July 17. Out of 20 brokerages updating their targets in July, most assigned 'Sell', 'Underperform', 'Underweight', or 'Hold' ratings, with only HSBC, Nomura, and YES Securities maintaining 'Buy' calls.
Ashika Stock Broking, holding a 'Hold' rating, noted that IndusInd Bank is nearing the end of a transitional phase following a management overhaul prompted by accounting discrepancies last year. The brokerage anticipates a shift towards execution, with management expecting credit growth to gradually return to industry levels after an 8% loan book decline in FY26. Ashika projects a 9% compound annual growth rate (CAGR) for both advances and deposits over FY26-FY28E, expecting a gradual improvement in profitability.
YES Bank: Analyst Concerns Persist
YES Bank, a stock with an even larger retail investor base of over 59.17 lakh as of June 30, also presents a notable downside risk. Its consensus target of Rs 20.90, compared to a prevailing price of Rs 23.04, suggests a 9.3% potential downside for investors.
The sentiment around YES Bank is largely negative, with eight 'Sell' recommendations against just two 'Buy' and two 'Hold' calls. The private lender's profit growth in the first quarter fell below expectations. Key brokerages like Kotak Institutional Equities suggested a target of Rs 20, while Morgan Stanley and Investec pegged it even lower at Rs 15. ICICI Securities offered a slightly higher target of Rs 24, and Axis Capital held the highest target at Rs 28.
ICICI Securities highlighted that the bank's profit after tax (PAT) was flat quarter-on-quarter due to higher provisions, mainly because of muted Security Receipts (SR) redemptions. While loan growth accelerated to 18% year-on-year, largely driven by corporate lending, the PAT miss was attributed to higher provisions from slower SR recoveries and increased staff costs. Nuvama Institutional Equities added that while headline asset quality remained stable, the SME segment witnessed an uptick in slippages, and Net Interest Margin (NIM) remained flat and relatively soft.
Other Largecaps with Downside Potential
Beyond IndusInd and YES Bank, four other largecap stocks within the BSE100 index also have consensus downside targets. These include Dixon Technologies (India) Ltd, Divis Labs, IDFC First Bank, and Lupin. Dixon Technologies, for instance, has a target suggesting a 7.8% downside, though some recent individual brokerage targets (Investec, UBS, Nomura, HSBC, Macquarie) hint at potential upside for the counter.