Indian Bank extends fall into 2nd day, hits 2-month low; down 10% in 4 days

The current trend of higher recoveries than slippages is expected to continue through FY25, while the bank's ability to control slippage and maintain asset quality will remain a key monitorable

Indian Bank share price hit a two-month low of Rs 478.35 on the BSE on Thursday, down 3 per cent in the intraday trade. The stock extended its 3-per cent fall, which it logged on Wednesday amid heavy volumes.

 

In the past four trading days, the stock price of the public sector bank has declined 10 per cent. It is trading at its lowest level since January 13, 2025. The stock had hit a 52-week low of Rs 467.20 on March 20, 2024.

 

At 09:35 AM, Indian Bank shares were trading 2 per cent lower at Rs 483 on the back of nearly two-fold jump in average trading volume. In comparison, the BSE Sensex was up 0.09 per cent at 74,099. Around 510,000 equity shares have, together, changed hands on the NSE and BSE till the time of writing this report.

 

Indian Bank is a mid-sized bank in the public sector with a loan book size of Rs 5.6 trillion and a deposit base of Rs 7.0 trillion. Allahabad Bank was merged with Indian Bank on April 1, 2020, and it operates through a network of 5,877 domestic branches.

 

For the October to December quarter (Q3FY25), Indian Bank posted a 35 per cent year-on-year (Y-o-Y) growth in net profit at Rs 2,852 crore after improving asset quality and "efficiency parameters". The public sector lender had made Rs 2,119 crore in consolidated net profit in Q3FY24. Net interest income (NII) increased by 10 per cent Y-o-Y to Rs 6,415 crore from Rs 5,815 crore in Q3FY24.

 

The bank's asset quality improved considerably during the quarter. Gross non-performing assets (NPA) decreased by 121 basis points (bps) to 3.26 per cent in December 2024 from 4.47 per cent in December 2023. Net NPA reduced by 32 bps to 0.21 per cent from 0.53 per cent.

 

The current trend of higher recoveries than slippages is expected to continue through FY25. The bank's ability to control slippages and maintain asset quality will remain a key monitorable, according to analysts.

 

Indian Bank has strengthened its balance sheet by making additional specific and floating provisions. Improvement in the bank's underwriting quality has strengthened its asset quality ratios. The bank's impressive progress in enhancing asset quality and other business metrics, including margins, is expected to continue in the near future, brokerage firm Geojit Financial Services said in its Q3 results review report.

 

The bank's digital migration rate has impressively increased from 87 per cent to 92 per cent, reflecting a strong shift towards digital platforms. This transition has fueled a 125 per cent Y-o-Y growth in digital business, with digital deposits soaring by 186 per cent. Additionally, the adoption of digital solutions in the RAM (Retail, Agriculture, MSME) sectors has seen substantial growth, further enhancing the bank's operational efficiency and customer reach, the brokerage firm added.