Mumbai: IndusInd Bank stock price has experienced a dramatic decline, falling over 38 per cent in the past six trading sessions, including a 7 per cent drop on Wednesday. This sharp downturn follows the bank's disclosure of accounting discrepancies related to internal derivatives. The stock hit a new low of Rs 605.40 on the BSE.
Stock plummets 38% in sessions
The bank's internal review indicated a potential one-time adverse impact of approximately 2.35 per cent on its net worth as of December 2024, which was Rs 67,100 crore. This translates to a post-tax impact of Rs 1,577 crore, or Rs 2,100 crore pre-tax, potentially leading to a loss in the fourth quarter of the 2025 fiscal year and a 25 per cent reduction in overall FY25 earnings. Analysts at Prabhudas Lilladher estimate that the bank's CET-1 ratio could drop by 37 basis points to 14.8 per cent. Consequently, the brokerage downgraded the stock to ‘Hold’ from ‘Buy,’ citing concerns about earnings quality and future leadership.
Despite the turmoil, Ashok Hinduja, chairman of IndusInd International Holdings Ltd., the bank's promoter, has publicly expressed his full confidence in Managing Director and CEO Sumant Kathpalia. He emphasized that the issue is not a fraud but rather a technical or employee-led problem.
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Technically, the stock is under significant selling pressure, having broken through key support levels. Analysts suggest the Rs 580-600 range as the next support zone, with resistance at Rs 780-790. They advise investors to remain cautious and observe further developments. The Rs 770-800 range is now seen as the new intermediate resistance, while the Rs 600-580 range is the immediate support.
As of 1:10 PM, IndusInd Bank shares were trading slightly lower at Rs 690 on the BSE. Analysts warn of continued volatility until the situation stabilizes and more clarity emerges.
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