Kotak Institutional Equities said that the bank has lost credibility. This could potentially impact its profit by around Rs 1,500 crore, according to a person familiar with the matter. All internal trades since April 2024 have been unwound, and the bank now holds no unhedged positions. The bank has ceased internal trades and transitioned to external trades with counterparties. All foreign currency borrowings converted to INR are now hedged based on tenor, ensuring no exposure on the balance sheet. The hit will have to be reversed through income statement, mostly through NII, and will be done in Q4FY25E. The gap came up in an internal review, and bank appointed an external auditor in Q3FY25, whose report will be out by end-March 2025. \”The time line is discomforting: the CFO resigned just before the Q3 earnings, the CEO recently got a one-year extension instead of three and now a derivatives-induced dislocation. We believe IndusInd Bank’s credibility and earnings shall be impacted,\” said the brokerage. The brokerage cut its fair value assumption on the stock to Rs 850. IIFL Securities, on the flip side, maintained its ‘add’ rating, but cut its share price target to Rs 910 per share, down from Rs 970 earlier.