IndusInd Bank Tumbles 4% As Accounting Woes Prompt Brokerages To Lower Projections

The shares of IndusInd Bank tumbled as much as 4% to Rs 750 during the morning trade on Friday, as brokerages became more cautious after the bank disclosed accounting issues.

What Are The Accounting Issues?

There have been some fresh discrepancies and the bank said that its Internal Audit Department (IAD) has found that a cumulative amount of Rs 674 crore which was incorrectly recorded as interest over three quarters of FY24-25, which was fully reversed as on January 10, 2025.

Following a whistleblower's complaint, the IAD was asked by the Board's Audit Committee to review transactions recorded in "other assets" and "other liabilities".

On April 22, the lender said that as part of the process of finalisation of accounts, the bank's IAD is conducting a review of the bank's MFI business to examine certain concerns and it has engaged EY to assist the IAD.

Following this the IAD has submitted a report on May 8, 2025.

Brokerages Lower Projections

After the disclosure of the latest round of discrepancies including the accounting lapses reported in March in the derivatives portfolio, CLSA has downgraded the IndusInd Bank stock and reduced target prices.

CLSA has downgraded the shares of IndusInd Bank from 'Outperform' to 'Hold' and has reduced the share price target from Rs 900 to Rs 780.

Additionally, CLSA has also reduced the private lenders' profit after tax (PAT) forecast by 22% for FY25, on the back of recent financial reversal.

Further, the brokerage has also slashed its FY26 and FY27 estimates by 13% and 17%, respectively, while taking account of the net interest margin (NIM) compression and slower growth.

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