Buy Indian Bank, target price Rs 310: Emkay Global

Emkay Global has buy call on Indian Bank with a target price of Rs 310. The current market price of Indian Bank is Rs 276.85. Indian Bank, incorporated in the year 1907, is a banking company (having a market cap of Rs 34473.81 Crore).

Indian Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 12714.20 Crore, up 6.86 % from last quarter Total Income of Rs 11897.53 Crore and up 10.43 % from last year same quarter Total Income of Rs 11513.70 Crore. The bank reported net profit after tax of Rs 1287.39 Crore in latest quarter.

Investment Rationale
Indian Bank reported healthy core profitability on the back of healthy margins and better other income, partly offset by higher staff costs. Bank expects staff costs to remain elevated in H2 due to provision towards the new wage cycle. Higher recovery/w-offs led to improvement in the NPA ratio; Management expects NPA ratio to trend down and, this along with the higher PCR, should contain incremental LLP.

Promoter/FII Holdings
Promoters held 79.86 per cent stake in the company as of 30-Sep-2022, while FIIs owned 2.06 per cent, DIIs 12.09 per cent.