IndusInd Bank: IndusInd surges as derivatives loss estimates allay concerns

Analysts, though, said they will remain watchful about the management actions and burden on the microfinance book going ahead.

IndusInd stock ended 7.1% higher at ₹788.3 on Wednesday, while the benchmark BSE Bankex rose 1.4%. IndusInd shares have gained over 14% in the past two trading sessions.

In March, the private lender’s disclosure of accounting discrepancies involving internal derivative trades had spooked investors. This led to multiple downgrades and its shares fell 27% in a single day on March 11.

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Now, the stock has recovered most of its losses and is down 12.5% from the date of the announcement.”There have been no significant discrepancies between the expected and reported losses related to derivatives at IndusInd Bank, which has provided some relief to the markets and contributed to the recent rally in the stock,” said Shrikant Chouhan, head of equity research at Kotak Securities.

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The external auditors estimated that the losses amounted to 2.27% of its net worth as of December 2024.”This is marginally lower than the number estimated in the bank’s internal review (2.35% of net worth). We believe this is incrementally positive in the near term as the impact of discrepancies will be limited to what was ascertained earlier by management,” said analysts at Macquarie.The brokerage has an ‘outperform’ rating on IndusInd, with a price target of ₹1,210.