IndusInd Bank’s share price fell as much as 6% to the day’s low of Rs 881.10 on the National Stock Exchange on March 10. It was the major loser in the Nifty 50. Investors have been selling the stock for the past five trading sessions without a break, falling almost 8%. Here are 4 reasons why it declined:
Long-term worries: RBI reappoints Kathpalia as CEO for 1 year
The Reserve Bank of India approved the re-appointment of Sumant Kathpalia as the Managing Director & CEO of the private lender for a period of one year. The bank has submitted the application for the approval of 3 years. “We hereby inform that the Reserve Bank of India vide its letter dated March 6, 2025 has conveyed its approval for re-appointment of Mr. Sumant Kathpalia as Managing Director & CEO of the Bank for a further period of one year with effect from March 24, 2025 till March 23, 2026,” read an exchange filing.
ALSO READCan the Nifty head to 23,000? Key levels to watch out for this week Nuvama on IndusInd Bank: Stock to remain under pressure
Nuvama Institutional Equities expects the banking stock to “remain under pressure” given low visibility, expectations of a soft Q4 FY25 and uncertainty on top management. The brokerage firm expects the bank will likely use the one year to transition to a new CEO. Given the RBI’s preference for an external CEO in case of recent appointments, the odds of an external CEO at IndusInd Bank after Kathpalia are high. “Should this happen, near-term earnings visibility—already impacted by a weak MFI cycle—will become lower,” said Nuvama.
Moital Oswal on IndusInd Bank: Cuts earnings estimate
Motilal Oswal has cut the earnings estimates by 9% for FY26 and 10% for FY27 as a result of the second instance when the MD’s term extension has been shorter than the board’s proposal. Meanwhile they maintained the ‘Buy’ rating on the stock with a target price of Rs 1,100. The reason behind this move is that the brokerage house thinks that at the current valuations, the bank is already pricing in most of these uncertainties. “We find the current valuations inexpensive, particularly as operating performance starts to recover in FY26,” the report stated.
ALSO READCan the Nifty head to 23,000? » Read More
