While the broader markets witnessed a stellar rally on Monday, IndusInd Bank shares bucked the trend, plunging over 6% from their intraday high. The stock opened strong at ₹839.80 but tumbled sharply to ₹786.15, marking a 3.87% decline from its previous close of ₹817.85 on Friday. This decline dragged the lender’s market capitalization below ₹61,250 crore.
Interestingly, the slump came on a day when the BSE Sensex surged by nearly 2,880 points or 3.62%, reaching a high of 82,333.49. IndusInd Bank’s underperformance stood out starkly against the backdrop of a buoyant market.
The primary reason behind this divergence lies in a negative outlook issued by Moody’s Investors Service. In a regulatory filing, IndusInd Bank disclosed that Moody’s reaffirmed its credit rating but downgraded the bank’s baseline credit assessment (BCA) and adjusted BCA to ‘ba2’ from ‘ba1’, while revising the outlook to ‘negative’.
Adding to investor concerns, Crisil also placed the bank’s long-term debt instruments under ‘Rating Watch with Negative Implications’, though it maintained the short-term rating at ‘Crisil A1+’.
The stock’s pressure was further exacerbated by a recent shake-up in its top management. The bank’s MD and CEO, Sumant Kathpalia, resigned following concerns related to accounting irregularities in its derivatives portfolio. His resignation followed shortly after Deputy CEO Arun Khurana also stepped down, deepening uncertainty around leadership stability.
Brokerage firms have responded cautiously. JM Financial, which has a ‘buy’ rating on the stock with a target of ₹765, cut the bank’s earnings per share (EPS) estimate by 8.9%, placing it among the worst affected. Motilal Oswal holds a ‘neutral’ view with a target price of ₹850, while BNP Paribas, though optimistic on the broader banking sector’s earnings prospects for FY26, retained a negative rating on IndusInd Bank with a target of ₹860.
BNP Paribas noted that margin expansion for large banks is likely to stabilize or improve in the second half of FY26. However, it emphasized that the timing of interest rate cuts will be crucial for any sustained recovery in margins.
