Shares of IndusInd Bank rebounded on Thursday after sharp declines, following the bank’s disclosure of accounting discrepancies and a record quarterly loss. The lender revealed past incorrect accounting in derivative trades and microfinance interest, leading to significant financial adjustments. The bank confirmed its financials now fully represent these concerns. Despite recent management changes, IndusInd’s stock showed recovery, rising as much as 3.5% on the Nifty 50, after earlier falling 6%. Several brokerages have downgraded the stock and cut price targets due to ongoing concerns about profitability and management clarity.
IndusInd Bank’s shares recovered on Thursday after experiencing significant volatility following the disclosure of accounting discrepancies and a record quarterly loss. The stock rose as much as 3.5% to ₹796.70, making it the top gainer on the Nifty 50 index for the day, after earlier falling by as much as 6%.
The private lender revealed that past incorrect accounting related to internal derivative trades resulted in a $230 million adjustment to its financials. Additionally, an internal audit of its microfinance business found approximately $80 million was incorrectly recorded as interest income over three quarters. These issues culminated in the bank posting its largest-ever quarterly loss in the latest results.
Following the disclosure, IndusInd Bank’s chairman confirmed that the bank’s financial statements now fully and fairly represent all concerns identified. The company also highlighted ongoing management changes, with the CEO and deputy CEO stepping down recently.
Despite the stock’s rebound, several brokerages downgraded their ratings and lowered price targets amid concerns about the bank’s profitability and the lack of clarity around its future management team.
The stock’s movement reflects the market’s cautious optimism after the bank’s efforts to address past issues and provide transparent financial reporting, even as uncertainties remain about its path forward.