Motilal Oswal's research report on Indian Bank
Indian Bank (INBK) reported a 4QFY25 PAT of INR29.6b (up 31.6% YoY/ 3.6% QoQ; 4% beat), driven by lower provisions and higher other income. NII grew 6.2% YoY/flat QoQ (in line) at INR63.9b. NIM dipped 8bp QoQ to 3.37% during the quarter. Net advances grew 10.9% YoY/5.3% QoQ, while deposits grew 7.1% YoY/5.0% QoQ. Consequently, the C/D ratio increased 28bp QoQ to 77.5%. CASA ratio stood flat at 38.4%. Fresh slippages increased to INR14.3b vs. INR10.2b in 3QFY25, amid higher Agri and MSME slippages. GNPA/NNPA ratios, though, continued to improve by 17bp/2bp QoQ to 3.09%/0.19%. PCR stood flat at 93.9%.
Outlook
We tweak our earnings estimates and anticipate the bank to deliver an FY27E RoA/RoE of 1.3%/16.9%. Reiterate BUY with a TP of INR670 (premised on 1.1x FY27E ABV)..
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