IndusInd Bank shares have taken a nosedive, falling 27% in a single day, marking one of the worst declines in the bank’s history. The stock closed at ₹655.95 on March 11, 2025, and technical indicators suggest there may be more downside ahead.
What’s Behind the Massive Crash?
The sell-off began after IndusInd Bank revealed issues with its foreign exchange (forex) derivatives portfolio. An internal review found valuation discrepancies that had been accumulating for years, potentially impacting the bank’s net worth by ₹1,577 crore post-tax.
Adding to the concerns, the Reserve Bank of India (RBI) recently gave CEO Sumant Kathpalia only a one-year extension instead of the usual three years. This move has raised red flags about leadership stability, making investors even more nervous.
Technical Analysis: How Low Can It Go?
From a technical perspective, the stock has broken key support levels and could drop further. It has fallen below its 200-month moving average of ₹820, a critical long-term support level. If it remains under ₹783, analysts warn it could slide to ₹675, then ₹585, and potentially even ₹500.
- RSI (Relative Strength Index): At just 13.12, the stock is in oversold territory, signaling continued selling pressure.
- MACD (Moving Average Convergence Divergence): At -42.01, the momentum is strongly bearish.
- ADX (Average Directional Index): With a reading of 26.10, the downward trend appears strong.
What Are Analysts Saying?
Major brokerage firms have downgraded the stock and slashed their price targets:
- Nuvama has downgraded it to ‘Reduce’ from ‘Hold’ and cut the target price to ₹750.
- Motilal Oswal lowered its rating to ‘Neutral’ with a revised target of ₹925.
- Emkay Global cut its target price by 22% to ₹875, citing uncertainty over an external audit report expected in Q4FY25.
Should Investors Worry?
With accounting discrepancies, leadership concerns, and a weak technical outlook, investors are facing tough decisions. Analysts advise caution until there’s more clarity on the audit findings and the bank’s efforts to restore confidence. If you’re considering investing, it might be wise to wait and see how the situation unfolds.
