Indian Bank - Q1FY21 Company Update - ICICI Securities

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.

Valuation & Outlook

Integration process and current uncertain economic condition are seen keeping business momentum moderate. Better repayment trend by customers would keep restructuring at minimum level. High PCR at 80.5% & adequate CaR at 13.4% remain positive. Though long-term fundamentals look healthy, near term earnings would remain muted led by elevated credit cost on the back of ageing stressed asset. Expect gradual improvement in RoA, RoE to 0.4%, 6.6%, respectively, in FY22E. Given 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.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IndianBank_CoUpdate_Aug20.pdf

Shares of INDIAN BANK was last trading in BSE at Rs.63.15 as compared to the previous close of Rs. 63.3. The total number of shares traded during the day was 76275 in over 646 trades.

The stock hit an intraday high of Rs. 63.95 and intraday low of 62.6. The net turnover during the day was Rs. 4808756.

Source : Equity Bulls

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