IndusInd Bank Stock Crash: Major Downgrades by Brokerages
Stock Hits 52-Week Low as Brokerages Slash Target Prices
IndusInd Bank Stock Crash: IndusInd Bank saw its share price on the National Stock Exchange tumble 20% to ₹720.35 on Friday, 11 March, a new 52-week low, triggering three successive lower circuits before 10am. The bank had shared that markdowns on internal derivative transactions understated it by 2.35% on net worth after tax.
Following these revelations on the bank, multiple brokerages have lowered ratings and cut target prices drastically
Nuvama Institutional Equity Services
Large number of brokerages cut price targets for IndusInd Bank. Nuvama lowered rating on IndusInd Bank to Reduce from Hold, reducing the target price 32% to ₹750 from ₹1,115. Concerns are raised regarding earnings clarity, derivatives risk and leadership transition.
Motilal Oswal
Motilal Oswal has downgraded its rating to Neutral and lowered the target price to ₹925 per share, stating that accounting inconsistencies stemming from derivatives dealings have undermined investor confidence and worsened the bank’s structural challenges.
Macquarie’s Positive Comment
In contrast to the others, Macquarie retained an Outperform call on the stock with a target of ₹1,210 but conceded that there are concerns over internal control and compliance issues.
Morgan Stanley and Prabhudas Lilladher
Morgan Stanley feels that there is falling visibility on the road ahead for IndusInd and has pegged its target price at ₹900 while Prabhudas Lilladher has cut its rating to Hold, with a target lowered from ₹1,400 to ₹1,000 on the prospect of a 25% decline in FY25 PAT.
According to the recent news updates, Current fears surrounding the future of IndusInd Bank leave investors to remain wary. Reportedly, it becomes that poor management choices and decisions by regulators shall be crucial in restoring confidence.
