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Relief rally for IndusInd Bank amid clarity on derivative exposure

ICICIdirect Research 17 Apr 2025 DISCLAIMER

IndusInd Bank saw a strong rebound this week, gaining over 12% in two days, after PwC’s final report confirmed derivative-related losses at ₹1,979 crore, translating to 2.27% post-tax impact on net worth - slightly lower than earlier anticipation. This came as a relief to the street, as it allays investors fear of losses being significantly higher.

The RBI-mandated forensic audit by Grant Thornton Bharat is still ongoing, and its findings remain a key monitorable. Meanwhile, investor focus now shifts to the upcoming Q4FY25 results as management has guided for a profitable quarter, expected to be supported by utilisation of contingent provisions.

While stress in microfinance portfolio - roughly 10% of the book - is expected to peak by 1HFY26, change in leadership (amid shorter extension to existing MD) would be awaited to further lift sentiment and act as a catalyst for the next leg of re-rating.

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