MUMBAI — IndusInd Bank’s stock has been on a wild ride, and the latest twist hit hard on April 28 when Deputy CEO Arun Khurana abruptly resigned. This bombshell came just days after the bank dropped a report revealing a ₹1,959.98 crore accounting hit tied to dodgy derivative trades. Now, with the board scrambling to rejig its top brass, investors are left wondering: what’s next for the stock? Analysts, meanwhile, are slashing price targets, signaling turbulent days ahead.
Khurana’s exit wasn’t subtle. In his resignation letter, he took the fall for the derivative mess, admitting his oversight of the treasury front office put him in the hot seat. “Considering the recent unfortunate developments,” he wrote, “I hereby resign, effective immediately.” The bank’s board, already on edge, had launched an independent probe on March 20 to untangle the financial discrepancies. By April 26, the investigation pinned the total damage at ₹1,959.98 crore for the 2024-25 fiscal year. That’s a hefty 2.27% of the bank’s net worth, enough to make any shareholder wince.
The stock itself? It’s been a rollercoaster. On April 28, shares nudged up 1% to close at ₹830.45, a flicker of optimism after a brutal stretch. Just weeks earlier, on March 11, the stock cratered 27% in a single day when the derivative scandal first broke, dragging it to a low of ₹657.25—the same level it hadn’t seen since November 2020. Since then, it’s clawed back some ground, but the scars remain. The 52-week high of ₹1,550 in June 2024 feels like a distant memory, while the 52-week low of ₹605.40 on March 12 looms as a grim reminder of the stakes.
Analysts aren’t sugarcoating it. Kotak Institutional Equities, once bullish, slashed its target price to ₹850 from ₹1,400 and downgraded the stock to “Reduce” from “Buy.” Motilal Oswal wasn’t far behind, trimming its target to ₹925. ICICI Securities and Nuvama set theirs at ₹850 and ₹750, respectively, while Nirmal Bang pegged it at ₹900. PL Capital, slightly less pessimistic, sees it hitting ₹1,000. The consensus? Pain’s coming, and the stock’s likely to stay under pressure. Reasons pile up: weak loan growth, shaky asset quality, and lingering governance concerns after the accounting fiasco.
The bank’s Q2 numbers didn’t help. Net profit tanked 40% year-on-year to ₹1,331 crore, missing expectations as loan loss provisions nearly doubled. Net interest margins shrank to 4.08% from 4.29%, and fresh slippages—especially in consumer finance—spiked. Deposit growth held steady, but that’s cold comfort when the Reserve Bank of India’s breathing down their neck, demanding finalized accounts pronto. Adding fuel to the fire, SEBI’s sniffing around for possible insider trading by senior officials, a probe that could cast a long shadow.
The management overhaul is still unfolding. On April 27, the board vowed to “re-align roles and responsibilities” and hold those responsible accountable. Khurana’s departure seems like the first domino, but more could fall. CEO Sumant Kathpalia’s tenure, already under scrutiny after a one-year extension instead of the expected three, faces fresh questions. The bank’s scrambling to restore trust, with an independent firm’s report now guiding their next steps. They’ve also clarified they didn’t hire EY for a forensic audit, despite rumors swirling otherwise.
For now, IndusInd’s market cap hovers around ₹64,704.37 crore, ranking it 13th among Indian banks. Its price-to-earnings ratio sits at 8.83, with a price-to-book ratio of 1.01. Foreign institutional investors trimmed their stake to 29.53% by March 31, down from 38.4% in June 2024, while mutual funds hold 27.55%. Promoters, with a modest 15.7% stake, have pledged 50.86% of their shares, a detail that’s raised some eyebrows.
Investors are jittery, and for good reason. The bank’s staring down a laundry list of challenges: fixing internal controls, stabilizing profits, and convincing the market it’s not a sinking ship. Analyst targets suggest limited upside—anywhere from ₹750 to ₹1,000 in the near term. Until the dust settles on the management shake-up and the derivative fallout, IndusInd’s stock looks like it’s in for a bumpy ride.