Indian Bank’s shares jumped by 3.5% to Rs 578 on May 5, following strong financial results for the March quarter (Q4FY25), which impressed investors.
So far in 2025, Indian Bank’s stock has increased by over 10%, significantly outperforming the Nifty 50 index, which has grown by just 3%.
For the quarter ending March 31, 2025, the bank reported a 32% increase in its net profit, reaching Rs 2,956 crore, up from Rs 2,247 crore in the same period last year. This growth was driven by higher income and better asset quality.
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- Net Interest Income (NII): Increased by 6.2% to Rs 6,389 crore.
- Operating Profit: Grew by 17% to Rs 5,019 crore.
- Asset Quality: Improved with the gross non-performing asset (NPA) ratio falling to 3.09% from 3.26%, and net NPA down to 0.19% from 0.21%. The provision coverage ratio (PCR) is strong at 98.10%.
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Key profitability indicators also improved:
- Return on Assets (RoA): Increased to 1.37%.
- Return on Equity (RoE): Improved to 21.01%.
- Cost-to-Income Ratio: Decreased to 45.05%.
- Net Interest Margin (NIM): Stayed strong at 3.48%.
Looking ahead, the bank expects a NIM between 3.15% and 3.30%, and a positive growth outlook for its core businesses.
Motilal Oswal, a brokerage firm, has kept a “buy” rating on Indian Bank, setting a target price of Rs 670 per share. They highlighted that the bank’s business momentum has improved, and the credit-deposit (CD) ratio is showing positive signs.
The firm also noted that the bank is focused on profitable growth and maintaining strong asset quality. Its high coverage ratio and low credit losses provide confidence for future growth.
In terms of business growth:
- The bank’s Retail, Agriculture, and MSME (RAM) loans grew by 13% year-on-year, now making up 64.2% of its total domestic credit.
- Deposits grew by 7% to Rs 7.37 lakh crore.
- The CASA (Current and Savings Account) ratio stood at 40.17%.
Lastly, the bank’s board has recommended a dividend of Rs 12.60 per share for FY25, which will need shareholder approval at the upcoming Annual General Meeting.
