Buy Indian Bank; target of Rs 300: ICICI Direct
ICICI Direct’s research report on Indian Bank
Indian Bank reported a stable operational performance at Rs 1245 crore, on the back of steady growth in NII at ~8% YoY to ~Rs 1763 crore & higher other income at ~Rs 570 crore, up ~16% YoY. However, elevated provision at Rs 1121 crore, led by divergences dented earnings. The bank reported a loss of ~Rs 190 crore. Growth in advances remained healthy at 15.8% YoY to Rs 1.88 lakh crore. It was broad based across segments including corporate as well as retail and MSME. Deposit accretion remained healthy with CASA ratio at ~35.4%. High traction in term & saving deposits led to growth in liabilities while CA mobilisation remained muted.
The bank is relatively better placed in terms of balance sheet strength, capital & earning potential. Hence, we maintain our target at Rs 300, assigning multiple of ~1x FY21E ABV. We maintain our BUY recommendation.
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