IndusInd Bank’s 2024-25 earnings estimates have been cut 25% by brokerage CLSA factoring in the ₹15.30 billion derivative loss and by 9-10% for the next two years, anticipating slowing credit growth, higher cost of funds, concerns over potential financial discrepancies, management stability, and possible regulatory intervention. Instead of the usual three-year term, the one-year extension granted to the bank's Managing Director has raised investor anxieties. Additionally, speculation that a banker with public sector experience could be appointed as the next MD has further dampened market sentiment.The brokerage has cut loan growth estimates by 2-4% over the next two fiscal years, as the bank could prioritise resolving governance and compliance issues over branch expansion. It has also raised the bank’s credit cost estimates for FY26, citing microfinance collection challenges in Karnataka, where 13% of IndusInd’s microfinance exposure is concentrated. As a result, the brokerage firm has cut its target price by 30% to ₹900 from ₹1,300, even as it continues to rate the stock as "Outperform," anticipating a recovery once clarity emerges.
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