IndusInd Bank share price extends crash; banking stock sheds 38% market cap in six straight sessions

IndusInd Bank share price declined more than 7% on Wednesday, extending its sharp fall for the sixth straight day. IndusInd Bank shares slid as much as 7.7% to a fresh low of ₹605.40 apiece on the BSE.

IndusInd Bank shares have declined by over 38% over the past six consecutive sessions, with the most significant single-day drop of 27% occurring on Tuesday. The sharp decline in IndusInd Bank stock price follows the private lender’s disclosure of accounting discrepancies related to internal derivatives.

The fifth-largest private sector bank in India, IndusInd Bank’s internal review has estimated an adverse one-time impact of ~2.35% of its net worth as of December 2024 which was ₹67,100 crore suggesting a post-tax impact of ₹1,577 crore or ₹2,100 crore pre-tax.

Hence Q4FY25 could report a loss which would hit overall FY25 earnings by ~25%. CET-1 for December 2024 would decline by 37 bps to 14.8%, according to estimates by Gaurav Jani, Research Analyst at PL Capital- Prabhudas Lilladher

The brokerage firm has downgraded IndusInd Bank shares to ‘Hold’ from ‘Buy’ and cut multiple to 1.0x from 1.4x driven by uncertainties relating to earnings quality and future leadership. Its ABV for FY25, FY26 and FY27E has been revised downwards by 2.3% - 2.7%.

Promoter Hinduja backs IndusInd Bank’s MD

Ashok Hinduja, chairman of IndusInd International Holdings Ltd (IIHL), the promoter of IndusInd Bank, expressed complete confidence in the ability of the bank’s managing director (MD) and chief executive officer Sumant Kathpalia to steer the bank through its challenges.

“I’m not a part of the day-to-day operations of the bank, nor am I on the board. I have told the market and investors that our full support is there, like it always has been in the past. In the business of banking, problems may arise for many a reason—technical or employee-led. Luckily, it is not a fraud; that part is clear,” Hinduja said in an interview with Mint.

IndusInd Bank Shares Technical Levels

IndusInd Bank stock price has been witnessing heavy selling pressure and the stock has breached its major support levels.

“The trend in IndusInd Bank shares remains negative. The banking counter has strong support around ₹580 - 600 levels, while the resistance is seen at ₹780 - 790 levels. Traders should avoid making entry and should wait and watch for further developments in the bank,” said Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi.

While the bias is negative, Dongre suggests ‘sell on rise’ approach for IndusInd Bank shares.

Osho Krishan, Sr. Analyst, Technical & Derivatives, Angel One, noted that the IndusInd Bank stock price has recently experienced a breakdown from the ₹800 - 770 support zone, which has historically acted as a cushion.

“This indicates a disruption in the chart structure. IndusInd Bank stock is likely to remain volatile until the news flow stabilizes and there is more clarity. Until then, it may be wise to stay on the sidelines. Currently, the ₹770 - 800 range appears to be the new intermediate resistance level, while the ₹600 - 580 range serves as the intermediate support zone for the near term,” said Krishan.

At 9:35 AM, IndusInd Bank shares were trading 0.07% lower at ₹655.50 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.