Citi has reiterated its ‘Buy’ rating on IndusInd Bank, with a target price of ₹890, as the stock trades at ₹735.50. The brokerage noted that the external agency’s report has pegged the post-tax impact of the derivative portfolio discrepancies at ₹1,979 crore, or 2.27% of the bank’s net worth as of June 2024, slightly lower than the bank’s internal estimate of 2.35%.
Citi stated that this alignment between internal and external assessments helps reduce uncertainty, though it pointed out that the bank had already indicated the final impact might vary marginally.
However, with microfinance (MFI) stress and elevated provisioning continuing to weigh on earnings, the brokerage believes that incremental developments around the MD & CEO transition will now become a key monitorable for investors.
Citi’s positive stance reflects its view that the bulk of the risk from the derivative discrepancy is now priced in, and focus can gradually shift back to broader business fundamentals.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.