IIFL on Indusind Bank
Downgrade to Reduce vs Add, target price ₹690 vs ₹910
Journey from discrepancies to frauds; 1% ROA to become a distant reality
Total P&L hit of ₹47 bn (7% of 3Q networth)
Cut FY26-27 est. by 40% as we adjust for the inflated base profitability
Next event to monitor - recommendation of new CEO by the sonboard to the RBI by 30th June
Estimate frauds totalling to ₹46.6 bn hit the P&L in 4Q viz.
Derivatives accounting issue of ₹19.6bn;
Non-recognition of MFI NPAs of 18.8bn, resulting in provisions of ₹17.9 bn and interest reversal of ₹1.8 bn
Excess interest and fee income recognition from MFI business, resulting in net revenue reversal of ₹4.2bn; and
other incorrect accounting of previous years to the tune of ₹3.1 bn
Downgrade to Reduce vs Add, target price ₹690 vs ₹910
Journey from discrepancies to frauds; 1% ROA to become a distant reality
Total P&L hit of ₹47 bn (7% of 3Q networth)
Cut FY26-27 est. by 40% as we adjust for the inflated base profitability
Next event to monitor - recommendation of new CEO by the sonboard to the RBI by 30th June
Estimate frauds totalling to ₹46.6 bn hit the P&L in 4Q viz.
Derivatives accounting issue of ₹19.6bn;
Non-recognition of MFI NPAs of 18.8bn, resulting in provisions of ₹17.9 bn and interest reversal of ₹1.8 bn
Excess interest and fee income recognition from MFI business, resulting in net revenue reversal of ₹4.2bn; and
other incorrect accounting of previous years to the tune of ₹3.1 bn
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