IndusInd Bank Targets Market-Line Growth Post Overhaul, Aims for 1% RoA Recovery

IndusInd Bank is charting a recovery course under its new chief executive, Rajiv Anand. He anticipates the bank's growth will align with the broader Indian banking sector by the financial year 2026-27, particularly in deposit growth. By the subsequent year, the bank aims to expand its market share, eventually dominating chosen segments.

Anand, a veteran banker, has set a target for IndusInd Bank to achieve a Return on Assets (RoA) of 1% within the next 12 to 18 months. This metric, which indicates how efficiently a bank uses its assets to generate profits, had approached this level before the governance and accounting lapses occurred, leading to a negative RoA and a significant stock decline.

The bank's stock has fallen 18% in 2025, underperforming the Nifty 50's gain. However, Anand indicated that IndusInd Bank is unlikely to pursue capital raises from external investors, unlike some other Indian lenders. He believes the bank has adequate capital to support its operations for at least two more years and that raising funds now, when not required, could potentially backfire.

The bank plans to continue growing its commercial vehicle financing business, which it currently leads with a substantial loan book. Conversely, it intends to scale back its microloan portfolio due to business volatility, aiming to maintain a market share of 6-8% instead of the current over 10%. IndusInd Bank will also explore new business areas such as wealth management, acquisition financing, and loans against shares once regulatory frameworks permit.

Impact: This news is significant for investors as it details IndusInd Bank's strategic direction and confidence in its turnaround post-crisis. The CEO's clear targets for growth and profitability, coupled with a conservative capital strategy, could influence investor sentiment. Success in these plans could lead to improved financial performance and stock value. Rating: 8/10.

Difficult Terms: Return on Assets (RoA): A profitability ratio that measures how efficiently a company uses its assets to generate profit. It is calculated by dividing net income by average total assets. Governance Lapses: Failures in the oversight and management of a company, often leading to poor decision-making, unethical behavior, or regulatory breaches. Accounting Lapses: Errors or inaccuracies in a company's financial reporting and record-keeping. HNI (High Net Worth Individual): An individual who possesses substantial liquid assets, typically above a certain threshold, making them a target for wealth management services. Commercial Vehicle Financing: Loans provided by financial institutions for the purchase of vehicles used for commercial purposes, such as trucks and buses.