Emkay has downgraded IndusInd Bank from ‘buy’ to ‘add’, slashing the target price by ~22% to ₹875 from ₹1,125. The downgrade follows significant accounting discrepancies in the bank’s forex derivatives portfolio, which are expected to have an adverse impact of 2.35% on net worth as of December 2024, amounting to approximately ₹15.8 billion (post-tax).
Key insights:
- These findings are preliminary, with the final impact subject to an external audit set to conclude in Q4FY25.
- Past accounting discrepancies in forex derivatives are likely to affect FY25 return on assets (RoA) and net worth (NW).
- The current MD has assured to stay for one more year, while microfinance institution (MFI) stress is expected to peak in Q4FY25.
At the time of assessment, IndusInd Bank’s share price was trading at ₹901.95.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Please consult a financial expert before making any investment decisions.
