Divi’s Lab (2017) vs. IndusInd Bank (2024): Similar Setback-Recovery Pattern?

1. Big Shock Event:

   • Divi’s Lab → USFDA import alert (key revenue source hit) → Stock crashed 20%+ in a day
   • IndusInd Bank → Derivative loss + market panic → Stock fell 30%+ in a few days

2. Underlying Business Strength:

   • Divi’s had a strong API business, industry leadership, and good financials, despite the short-term issue.
   • IndusInd has high CASA, strong retail franchise, and well-managed asset quality (unlike Yes Bank/RBL Bank).

3. Market’s Emotional Reaction:

   • Divi’s fell sharply despite the issue being fixable within months.
   • IndusInd is getting punished more than even Yes Bank or RBL in their worst times, even though this is just a one-off event.

4. Recovery Timeline:

   • Divi’s recovered in ~1 year after showing regulatory progress.
   • IndusInd could recover within 6-12 months as clarity emerges (historical patterns show banks recover even faster if panic is overdone).

What This Means for IndusInd?

If history repeats, sharp recoveries happen once fear subsides. A 30%+ fall is often an overshoot in fundamentally strong firms. The divergence between panic and fundamentals is the opportunity—just like Divi’s made fresh highs later, IndusInd could too.

Would you like a deeper statistical look at how long different stocks took to recover from crises?

I am trying to draw a direct parallel between IndusInd Bank (2024) and Divi’s Labs (2016-2017) in terms of how setbacks unfolded in two waves:

1. First Shock (October 2024 for IndusInd, 2016 for Divi’s Lab)

   • Divi’s Labs (2016): First major USFDA warning → Stock crashed ~20%.
   • IndusInd Bank (October 2024): Microfinance NPA spike → Stock fell sharply (~20%).
   • Both stocks saw a partial recovery after the first hit, but fear remained.

2. Second Wave (March 2025 for IndusInd, December 2017 for Divi’s Lab)

   • Divi’s Labs (2017): A follow-up Import Alert → Another ~20% crash.
   • IndusInd Bank (March 2025): Derivatives exposure concerns → Another ~30% crash.

What Happened After for Divi’s Labs?

• Stock bottomed out after the second fall.
• Regulatory concerns eased, business remained strong.
• Massive re-rating over the next 1-2 years (stock doubled).

Potential Roadmap for IndusInd Bank?

• If no fresh issues emerge, this second fall could be the final washout.
• Earnings clarity + risk reduction can trigger a fast recovery (like Divi’s).
• Potential to double within 1-1.5 years from the low, just like Divi’s Labs.

Divi’s Labs (2016-2017) vs. IndusInd Bank (2024-2025)

Factor	Divi’s Labs (2016-2017)	IndusInd Bank (2024-2025)
First Fall (~20%)	USFDA warning in 2016	Microfinance NPA spike (Oct 2024)
Partial Recovery	Stock rebounded but remained weak	Stock rebounded from ₹1,100+ to ₹1,600+
Second Fall (~30%)	Import Alert (2017)	Derivatives concerns (Mar 2025)
Total Fall from Peak (~60%)	₹1,380 → ₹530 (-60%)	₹1,700+ → ₹680 (-60%)
Final Bottom & Recovery	Stock started rebounding post-2017	Potential recovery cycle starting?
Time to Recover Fully	~18 months	TBD, but similar timeline possible

If IndusInd follows Divi’s pattern, what could be next?

• Divi’s started rebounding AFTER the second fall was absorbed.
• Recovery took about 1.5 years to fully regain lost ground.
• If IndusInd follows a similar cycle, the next 6-18 months could be crucial.
• A move back toward ₹1,700 (previous highs) is possible if business normalizes.

💡 Psychologically, markets tend to overreact twice—first to a crisis, then to follow-up bad news—before a stock bottoms out. The second wave of panic usually cleans out weak hands before a real recovery.

If history rhymes, IndusInd’s second fall might be the final washout before a turnaround.