IndusInd Bank Shares & Stock Price Today LIVE: IndusInd Bank Share Price Today LIVE: IndusInd shares tumble 15% on reporting net worth impact due to discrepancies in derivative portfolio

Macquarie on IndusInd Bank

Outperform, TP Rs1210

Another significant negative development

Current issue raises questions on internal processes

Create questions on the robustness of banks internal process and compliance

Believe this could be one of the reasons of a sub-optimal CEO tenor extension

Channel checks seem to suggest that such kind of losses are possible when the book is not fully covered and as per some treasury heads of banks, the new RBI accounting rules cannot solely explain the discrepancy

Has a large market share in NRI deposits and has been offering higher rates to customers

NRI segment deposits at Rs 58600 cr rose 39% YoY for Q3FY25 vs overall deposit growth of 11% YoY

MS on IndusInd Bank

Equal Weight Call, Target Price Rs900/Sh

Visibility on IndusInd stock continues to reduce

Over the past three months, the CFO has resigned, the CEO has been given a shorter-than-expected tenure extension, and now we are made aware of a big loss in the derivatives portfolio

See downside risk to numbers post the company’s disclosure

Await further clarity on the discrepancy

Citi on IndusInd Bank

Maintain Buy; Cut TP to Rs 1160 from Rs 1378

Derivative Position Discrepancy to Knock Earnings/Networth

Disclosure Coincides with CEO Extension Update

Cut earnings estimate by 25%

Recent developments have raised the risk perception and impacts disclosed borrowings cost too

Bank trades below FY26E book given near-term concerns/uncertainty

Nuvama on IndusInd Bank

Downgrade rating to Reduce from Hold; Cut TP to 750

Bank disclosed a negative post-tax impact of 2.35% of net worth arising from a markdown on internal derivative trades

These internal trades pertain to 5–7 years up to 31 March 2024 (stopped thereafter).

These were internal FX derivatives on the bank’s FX borrowings (mainly multilateral) and deposits.

The time line is discomforting—the CFO resigned just before the Q3 earnings, the CEO recently got a one-year extension instead of 3

Believe IIB’s credibility and earnings shall be impacted

IIFL on Indusind Bank

Discrepancies in derivatives accounting to hit networth by 2.35%

Resultant impact will most likely be routed through the P&L.

In such an event, it is likely that IIB may report a loss in 4QFY25

Given that MFI slippages are likely to further rise qoq and NIMs are likely to contract further in 4Q.

Estimate ~35bps of CET1 hit, but with the proforma CET1 ratio of 14.8%, it should not necessitate a capital raise.

Emkay on IndusInd Bank

Downgrade to ADD from BUY

Cut tp by ~22% to Rs875 from Rs1125

Huge accounting discrepancies observed in its forex derivatives portfolio which is expected to have an adverse impact of 2.35% on its net worth as of Dec-24 (post tax: ~Rs15.8bn).

This is based on preliminary findings, and the final impact may vary following completion of the external audit in Q4FY25.

Past accounting discrepancies in forex derivatives to hit FY25 RoA and NW

Current MD assures to stay for one year; expect MFI stress to peak in Q4FY25

Jefferies on IndusInd Bank

BUY, TP Rs1040 from Rs1080

Surprise Accounting Adj. Leads to Profit Hit; Reflects Weak Internal Controls

While this is specific to certain types of transactions & relates to past years, it clearly reflects weak internal controls.

This along with shorter CEO term extension & challenges in MFI will limit rerating.

We lower FY25e earnings by 25%

Mgt clarified that it had informed RBI earlier, but to us this comes as a negative surprise reflecting lack of internal controls.

One-time earnings impact, but can lead to short-term derating

MOSL downgrades IndusInd Bank

Rating to Neutral from BUY

TP at Rs925 vs Rs1100

Accounting discrepancy inflicts 2.35% damage on net worth

Near-term uncertainties prevail

These discrepancies arose from internal trades with low liquidity (3/5-year yen, 8/10-year dollar borrowings) that were on swap contracts and not MTM.

Financial hit will be absorbed in Q4FY25

DAM Capital on IndusInd Bank

Downgrade to Neutral from BUY

TP cut to Rs920 from Rs1200

Indusind Bank today disclosed to exchanges that during its internal review processes relating to other assets & liabilities part of the balance sheet

They noted discrepancies in account balances.

Hence, as per assessment there could be an impact of 2.35% on bank’s Dec-24 net-worth i.e Rs16.0bn (post tax).

There are more questions than answers, but we try to decode the same as management has appointed an external agency to independently review and validate internal findings.

Assuming the bank will account for the impact as exceptional items, we adjust Q4FY25 profitability with losses and cut FY25E EPS by 25%.

Though valuations appear cheap at 1.0x FY26 ABV post cut of 3% BV, they don’t make a compelling case given the ongoing issues.

The uncertainty surrounding management continuity, asset quality and the bank’s business model, combined with the unclear outlook for FY26 ROAs, leaving the stock vulnerable to de-rating.