IndusInd Bank shares: What's next for stock amid top management rejig, check targets

Shares of IndusInd Bank dropped more than 3 per cent during the trading session on Wednesday after its MD and CEO Sumant Kathpalia resigned from his position in relation to the accounting discrepancies seen in the derivatives portfolio. The moves come just one day after Deputy CEO Arun Khurana's resignation, with immediate effect.

Following this, the RBI has approved the constitution of a committee of executives, composed of Head of Consumer Banking -- Soumitra Sen, and Chief Administrative Officer -- Anil Rao, to oversee the operations of the bank under the oversight and guidance of an oversight committee of the board.

Amid the exit of top management of the bank, analysts have turned cautious on the stock. Select analysts believe that the stock is unlikely to see any major sell-off but any major rally in the counter is also not on the cards considering the disruption. The process of appointment of a new MD & CEO may take another one or two quarters, which may keep the stock volatile during the same.

Shares of IndusInd Bank dropped more than 3.21 per cent to Rs 810.30 on Wednesday, with its total market capitalization slipping below Rs 65,000 crore mark. The stock had settled at Rs 837.30 on Tuesday, rising nearly 38 per cent from its 52-week low at Rs 605.40 hit in March 2025.

Emkay Global Financial Services has downgraded IndusInd Bank to 'reduce' from 'add' and cut its target price by 9.4 per cent after the spate of top management resignations, including the MD & CEO, which should increase business/margin disruption including risk of another round of deposit run-down, impact on asset quality, middle-management attrition, and possibility of appointment of an RBI nominee on the Board as well as a PSU banker as MD & CEO.

"It had recently pulled back, given that the assurance by the incumbent MD & CEO— on smooth management transition and no more skeletons in the cupboard -- seems to be challenged now. The Board has begun the CEO/ED hiring process, which may though take at least 3-6 months to seek RBI approval; thus, business would be hit in the interim and the recovery process prolonged, thereby making the risk-reward unattractive for IIB at current levels vs some peers," it added with a target price of Rs 725.

Macquarie has maintained its 'outperform' rating on the IndusInd Bank with a target price of Rs 1,210 on it, suggesting a more than 45 per cent upside. The overseas brokerage firm believes that the top management succession could serve as a significant catalyst for the stock. It also emphasized that the uncertainty around leadership is currently a key overhang.

IndusInd Bank may face negative sentiment in the near term after its CEO & MD, resigned while taking moral responsibility for a reported loss of 1,959.98 crore. Leadership transitions at the top, especially amid significant financial setbacks, tend to increase uncertainty regarding strategic continuity and governance, said Vishnu Kant Upadhyay, AVP - Research & Advisory, Master Capital Services.

"These financial and leadership headwinds have already been discounted in stock hence no major sell off is likely. But still, long-term investors may watch for clarity on succession planning and stabilisation efforts. Technically, if the stock breaches key support zones around Rs 770, it could invite further downside toward Rs 712 and then 640 levels. On the higher side, Rs 920-940 will continue to act as an immediate resistance," he said.