Mumbai: Shares of IndusInd Bank surged 4.7% on Wednesday after brokerage Nomura upgraded the stock to a ‘Buy’ from ‘Neutral’- marking one of the first upgrades following the recent accounting fiasco that led to top-level exits.

The firm set a price target of ₹1,050, implying a 24% upside from Wednesday’s close at ₹847.

“The commitment from the board to improve governance, the ongoing search for a new leadership, and the clear intent to ‘start FY26 on a clean slate’ are crucial positive signs,” said Nomura. The recent remarks from RBI acknowledging the bank’s recovery efforts also offer “a degree of regulatory comfort.”

The brokerage said potential approval for the Hinduja Group (via IIHL) to raise its stake in the bank could help ease investor concerns.

In March, IndusInd Bank disclosed ₹1,979 crore in derivative-related losses stemming from internal trades and accounting discrepancies. Subsequently, the lender’s CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned.

Nomura said the bank has since undertaken a significant clean-up of its books, absorbing a one-time hit of ₹5,300 crore (8% of net worth) in the March quarter to address legacy issues.”We compare IIB’s scenario to RBL (2021) and Yes Bank (2018), where leadership exits were followed by medium-term recoveries as fundamentals improved,” the note said. The stock has recovered from its recent low of ₹605.4, but is still down over 12% so far in 2025.