Geojit
Indian Bank (Buy)
CMP: ₹128.8
Target: ₹156
Indian bank is a mid-sized bank in the public sector, with a loan book size of about ₹1,94,000 crore and deposit base of about ₹2,53,000 crore. The bank operates through a network of 2,884 domestic branches largely distributed across the Southern States.
b) The net interest income (NII) grew at 7.6 per cent y-o-y due to higher growth in cost of funds compared to that of the interest yield.
c) The total income grew at 20 per cent y-o-y supported by 72 per cent y-o-y growth in other income, with an improved profit in sale on investments.
d) The banks loans/deposits grew at 13 per cent/15 per cent y-o-y in Q2FY20.
e) Asset quality improved with GNPA/NNPA at 7.2 per cent/3.54 per cent compared to 7.33 per cent/3.84 per cent in the last quarter.
f) We reduce our valuation to 0.35x BV of FY21E and retain our BUY rating with a revised downward target price of ₹156.