Indian Bank reported its first quarter of merged numbers with Allahabad Bank. The amalgamation of the bank came into effect on April 1, 2020. The bank reported a steady performance on business growth but higher provisioning arrested PAT growth. The bank had customers who have two months of their instalments unpaid (for May, June 2020) or have paid zero or one instalment at 7% of total loan book (overall morat at ~23%), which is relatively less compared to peers.
OutlookGiven slower growth seen ahead, we maintain HOLD rating with a revised target price of Rs 70 (earlier Rs 50), valuing the stock at 0.4x FY22E ABV.
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